Retail Industry Leadership Group meeting minutes: August 2022

Attendees and apologies

ILG members attending in person

• Tom Arthur, Minister for Public Finance, Planning and Community Wealth and ILG co-Chair (Minister)
• Andrew Murphy, Chief Operating Officer - John Lewis Partnership and ILG co-Chair (AM)
• David Lonsdale, Director – Scottish Retail Consortium (DL)
• Tony McElroy, Head of Communications and Devolved Government Relations – Tesco (TM)
• Nick Peel, Managing Director - St James Quarter (NP)
• Debbie Harding, Chief Corporate Officer – Dobbies (DH)
• Tracy Gilbert, Regional Secretary – Usdaw (TG)
• Andrew McRae, Policy Chair - Federation of Small Business (AMc)
• Polly Jones, Senior Manager, Corporate Affairs – Scotland, Asda (PJ)
• Meryl Halls, CEO - Booksellers Association of the UK/Eire (MH)
• Jackie Cuddy, Centre Manager - Eastgate Shopping Centre (JC)
• Colin Smith, Chief Executive - Scottish Wholesale Association (CS)

Attending via MS Teams

• Mo Razzaq, National (UK) Deputy Vice President – National Federation of Independent Retailers (MR)
• Reuben Chesters, Project Manager – Locavore (RC)

Apologies received

• Chris Tiso, Director - Graham Tiso Ltd.
• Robert Deavy, Scotland Organiser – GMB
• Sonya Harper, Central Operations Director - CJ Lang & Son

Presenters

• Aidan Grisewood, Interim Director, Economic Policy - Scottish Government (AG)
• Catherine Brown, Retail and Cities Policy Unit Head - Scottish Government (CB)
• Helen Martin, Head of Secretariat for the Fair Work Convention - Scottish Government (HM)

Secretariat

• Anne Buchanan, Retail Strategy & Delivery Team Leader - Scottish Government
• Celeste Wilson, Senior Policy Officer - Retail Strategy & Delivery - Scottish Government
• Jane Macfarlane, Policy Officer - Retail Strategy & Delivery - Scottish Government

Observers

• Lucy Brown, Operations Programme Director - John Lewis Partnership Andrea Glass, Head of Regions and Enabling Sectors - Skills Development Scotland
• Iain Hamilton, Head of Creative Industries - Highlands and Islands Enterprise
• Jenny Bann, Retail and Cities Policy Team Leader – Scottish Government

Items and actions

Welcome, introductions and apologies

The Minister welcomed attendees to the first meeting of the Retail Industry Leadership Group, recognised that the cost crisis is resulting in an exceptionally challenging time for businesses and customers. He introduced Andrew Murphy as co-Chair and apologies were noted. 

AM noted the context of major forces impacting on retail – Brexit, the Covid-19 pandemic, inflation, climate change, low pay, automation and globalisation - and the  need for the ILG to challenge norms and drive the actions in the Retail Strategy.

Terms of Reference

Points raised in discussion:

• DL asked whether the Scotland Office would be briefed on or receive minutes of ILG meetings, given the role it had in the strategy steering group
• DL also asked if the tone of the Vision statement developed by the Steering Group and published in the Retail Strategy could be made more aspirational and ambitious
• TM highlighted the need for the ILG to recognise shorter term immediate actions at the same time as delivering the longer-term vision for retail

Outcome: Terms of Reference were agreed

Action: Secretariat to discuss further with DL outwith ILG meeting. 

Presentation on National Strategy for Economic Transformation (NSET) - Aidan Grisewood 

Key points:

• NSET is a live strategy, structured across six Programmes of Action – Entrepreneurial People and Culture, New Market Opportunities, Productive Businesses and Regions, Skilled Workforce and Fairer and More Equal Society, underpinned by A Culture of Delivery
• productivity growth has been stagnant since the financial crash
• need to make progress on start-ups that move into high growth
• the strategy is ambitious and distinctive - focussed on delivery

Points raised in discussion:

Role of retail in economy and food security 

• TM said this was worth drawing out under the NSET pillar of Fairer and More Equal Society

Just Transition

• CS highlighted the work SWA are doing with Transport Scotland on fleet sustainability. Just Transition / net zero needs to fit across all of retail, and its supply chain, to ensure all are moving at the same pace
• TG raised the issue of new opportunities that will come from a Just Transition. The retail industry is constantly evolving and needs to plan for skills that will come with new job creation
• AM added that there are differences of scale in retail businesses which needs considered. There are challenges in trade-offs between People /Place /Technology including whether new technologies will mean roles will be local or global

Cost Crisis

Minister highlighted: 

• from around 2007 the acceleration of online shopping has seen an increase of over 30%
• post-Covid, retail is facing tough markets and labour shortages  

Emergency budget

• the emergency budget outcome is dependent on Westminster and the new Prime Minister, recognising this adds an extra degree of uncertainty
• SG is aware of industry’s asks on Non-Domestic Rates (NDR) as it considers emergency budget proposals 

Emergency Summit with Food Retailers

• when people are earning £0-6k income per year food poverty becomes an existential crisis
• SG will continue to press the UK Government for actions which could address the crisis. There has been no offer of furlough or bounceback loans etc. and SG is restricted in its fixed budget. 
• Role of the ILG
• to consider how the cost crisis might impact on the delivery of the strategy’s ambitions

Summary of points raised in discussion:

• magnitude of the cost crisis with energy costs and other inflation pressures (input inflation estimated to be 22%) posing an existential threat to business viability (raised by AMc, JC, NP)
• particular concerns around resilience of SMEs (raised by MH, RC)
• additional costs faced by businesses due to service charges and distribution costs being passed on, particularly in remote and rural areas (raised by JC)
• likelihood of fewer retail businesses by the end of the crisis (raised by NP)
• labour supply pressures resulting from UK immigration policy and Brexit (raised by NP, JC, AM)
• reduction in business confidence/ hesitance in developing investment plans (raised by MH)
• impact on employees - recent survey shows 7/10 Usdaw members surveyed are relying on insecure borrowing and struggling with repayments; 4/10 skipping meals (raised by TG)
• concerns around rent arrears, transport costs for staff (raised by TG)

Action: Issues raised will be shared with relevant SG policy areas by the Secretariat.

Priorities for Delivery - Catherine Brown 

Key points:

• this is a multi-year Retail Strategy and the delivery plan is a living document. There is a need to keep an eye on the longer term but to consider immediate issues and allow for flexibility
• does the order of priorities feel right, with the Fair Work Agreement first? 

Points raised in discussion:

• TG – happy to be involved in Fair Work working group and lend support. The Cost Crisis is immediate but Fair Work Agreement is also critical
• DL – happy to be involved in Fair Work working group and the ongoing review of priorities
• DL talked about the British Retail Consortium’s Climate Action Roadmap and is happy to arrange for BRC colleague to present this to a future ILG or sub-group meeting

Outcomes: The outline Delivery Plan as presented was approved by the ILG. TG and DL self-nominated for the Fair Work Working Group.

Action: SG follow up on BRC’s Climate Action Roadmap presentation

Fair Work Convention presentation - Helen Martin  

Key points:

• Fair Work Convention brings together third, private, public sector expertise
• with inquiries into the Social Care and Construction concluded, focus of next inquiry is Hospitality
• every company is on a fair work journey – everyone can make improvements
• in-work poverty can be addressed through Fair Work

Points raised:

Helen asked the ILG to consider:

• how does Fair Work apply to their own businesses?
• how will a Fair Work Agreement interact with future proofing or reaching net zero targets? 
• what are the issues that an Agreement should cover?
• what will be the status of the Agreement, how do you make it meaningful? 
• how to encourage adoption of the Agreement across the industry? 
• what will success look like? 

Action: Further expressions of interest from the ILG members or proposals for third party nominees for the Fair Work Working Group to be forwarded to the Secretariat. 

Any other business

The Minister summed up the discussion and thanked the group for their contributions, adding:

• the Skills Audit and Action Plan will be the central theme of the next meeting. SDS will contact ILG members directly as part of the initial scoping exercise
• next ILG meeting to be held in November (subsequently confirmed as 8 November)