By David Lonsdale


I can’t remember a time with as much disruption as the last four years. The Beast from the East, on/off Brexit deals, a pandemic with several lockdowns, an HGV driver shortage, the "pingdemic", and a decline in shopper footfall which has yet to fully recover. A war in Europe, creating untold suffering in Ukraine and reverberations through supply chains around the world. And now a cost-of-living crunch, with inflation at a 40-year high and little end in sight supposedly until well into next year.

Many retailers tell me that the current environment is as challenging as they’ve seen. They find themselves squeezed between higher costs from all angles, multiple logistical issues, and weak demand from customers.

A tight labour market leaves many firms struggling to fill essential roles. Wage bills are rising fast. Global commodity prices have increased precipitously with global food price indices up 22 per cent in the last year alone. Energy costs – uncapped for businesses – are soaring. Outlays on shipping and freight remain elevated and a massive burden. Meanwhile, government has hiked up employers’ national insurance contributions, introduced a plastic packaging tax, and removed business rates reliefs brought in during the pandemic, all at a time when many firms are still paying back Covid era loans and tax deferrals.

Despite all this, retailers are focusing on how to support customers caught in the cost-of-living crunch. Value ranges have been expanded, discounts have been introduced for vulnerable customers, shoppers are being offered more options to spread payments, and many cost rises are being absorbed by retailers.

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Looking forward, retailers continue to seek cost savings across their operations, and many have pledged to invest in lower prices in the future. Many too are raising pay to help colleagues cope with the economic onslaught.

Unfortunately, things don’t look likely to get better any time soon. The Bank of England forecasts inflation will continue to rise this year, with an economic slowdown to boot. The UK may be the world’s sixth-largest economy but it is still being bludgeoned by external inflationary pressures.

The Scottish Retail Consortium is pushing for mitigations to help the industry. Glasgow council’s £105 shopper stimulus payment to 80,000 less well-off households is a positive move which could perhaps be copied elsewhere.

Scottish ministers should knock on the head any increase in business rates next spring, as mooted in their recent spending review. The business rate is already at a 23-year high. They should also speed up the restoration of the level playing field with England on the higher property rate, currently affecting 12,000 Scottish commercial premises of which a quarter are retail.

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Finance Secretary Kate Forbes needs to deliver on her plans to reform and reduce the cost of running the devolved government. It matters profoundly that she succeeds, as this will help mitigate against the need for future tax rises on individuals or firms which could in turn hold back the economy.

The Scottish Government could also look at its legislative pipeline and focus on the more important, bigger-impact measures. Over and above the deposit return scheme for drinks containers, which retailers are expending a great deal of capital on, there is a gamut of red tape either being implemented or under consideration. This ranges from mandatory calorie labelling on menus, restrictions on in-store food promotions, bans on single use plastics, levies on disposable cups, curbs on the sale of fireworks, and a ban on out-of-town retail development. Reviewing or pausing much of this would give retailers breathing space whilst allowing a focus on the mission-critical tasks.

So, lots to play for. And while its difficult to remember a time with so much disruption, I also can’t remember a time with so much resilience, innovation, and determination on display as I have seen from the industry and the hundreds of thousands of individuals who keep it together.

David Lonsdale is the director of the Scottish Retail Consortium