Retail Industry Leadership Group meeting minutes: December 2023

Attendees and apologies

ILG members attending

• Joe FitzPatrick, Minister for Local Government Empowerment and Planning and ILG Co-Chair

• Polly Jones, Head of Corporate Affairs for Scotland, Asda and Industry ILG Co-Chair

• David Lonsdale, Director, Scottish Retail Consortium

• Tracy Gilbert, Regional Secretary, USDAW (TG)

• Tony McElroy, Head of Communications and Devolved Government Relations, Tesco

• Meryl Halls, CEO, Booksellers Association of the UK/Eire

• Lucy Brown, Central Operations Director, John Lewis Partnership

• Karen Stewart, Centre Manager, Livingston Designer Outlet

• Dr Pete Cheema OBE, Chief Executive, Scottish Grocers' Federation

• Laura Mitchell, Head of Retail, Greggs

• Andrew McRae, Policy Chair, Federation of Small Business

Apologies

• Reuben Chesters, Project Manager, Locavore

• Debbie Harding, Chief Corporate Officer, Dobbies Garden Centres

• Sonya Harper, Central Operations Director, CJ Lang and Son

• Robert Deavy, Scotland Organiser, GMB

• Kyron Keogh, Co-founder and Managing Director, ROX - Diamonds and Thrills

• Colin Smith, Chief Executive, Scottish Wholesale Association

• Mo Razzaq, National (UK) Deputy Vice President, National Federation of Independent Retailers

Scottish Government

• Celeste Wilson, Team Leader, Retail Policy, Scottish Government

• Declan O’Neill, Senior Retail Policy Advisor, Scottish Government

• Phillip Lamont, Head of Criminal Law, Practice and Licensing Unit, Scottish Government

• Stuart Lewis, Head of Strategy and Collaboration, Police Powers, Scottish Government

Secretariat

• Tom Lowry, Policy Officer, Retail Policy, Scottish Government

Observers

• Stacey Dingwall, Head of Policy and External Affairs (Scotland), Federation of Small Businesses

Items and actions

Items and Actions

Welcome and opening remarks

• The Minister welcomed attendees to the fifth meeting of the Retail Industry Leadership Group (ILG) and thanked Polly Jones, Head of Corporate Affairs for Scotland - Asda, for accepting the position of Industry Co-Chair.

• He also thanked new ILG members Karen Stewart, Centre Manager of the Livingston Designer Outlet, Kyron Keogh, Co-founder and Managing Director of ROX – Diamonds and Thrills, and Laura Mitchell Head of Retail at Greggs for joining the group.

Hot Topics

Points raised in discussion

Cost crisis

• There have been a number of policy announcements recently which will support consumer expenditure including; a council tax freeze, peak rail fare removal pilot, and the reduction in employee National Insurance contributions from 6 January. All positive for retail businesses.

• Uplift in National Living Wage (NLW) in Spring 2024 will have implications as wage expenses are a large part of retailers outgoings.

• Businesses trying to maintain senior staff and junior manager’s differential in salary to the NLW, cost pressure at this level really has an impact. These roles are the most difficult to recruit for, recruitment has become easier for team members but when applicants look at slightly more senior roles they look at the differential in salary and don’t see the extra responsibility being worth it.

• Owners are resilient, they want to keep their business alive, but costs have increased greatly and It is hard for small businesses who cannot reduce costs.

• Rent in prime locations skyrocketing, market driven, but should be pointed out.

• While certain areas of the high streets are struggling there are also areas with high demand, this is reflected in rent costs.

• Solicitors are not using standardised documentation, which increases costs, need a better balance between landlord and tenant.

• Challenges between employers and employees, many factors involved, majority of retailers want to have best terms and conditions for their staff, but it is a difficult time, there are more job vacancies and increased instability.

• Managing costs for larger retailers is getting harder, cash needed to make new shops viable is mounting, it is becoming harder to make a return on investment, build costs and refurbishment costs are also increasing dramatically.

Trading conditions

• SRC produced a suite of data for footfall, retail sales and shop vacancies. This data shows that retail sales have been growing less than inflation.

• The past four months have shown a reduction in real terms in the growth of retail sales in Scotland.

• Footfall figures have reduced year on year over the last two months which is concerning as October, November and December is the ‘golden quarter’ for retail.

• This could have implications in the new year when revenues tend to half but costs still need to be met.

• Sales in bookstores have plateaued at the moment. Booksellers are almost making as much money as last year but are selling fewer units, which isn’t sustainable long term.

Regulation

• Forthcoming regulations are expected to have a significant cost impact upon retailers. Although they support policies which are well intentioned, need to understand the cost pressures.

• Government consultations on regulations are going the right way, which retailers are grateful for.

Non-Domestic Rates (NDR)

• UKG are planning an inflation matching uplift in business rates, going up by 6.7%, if the same is seen in Scotland this would be very challenging for retailers.

• Small business bonus scheme (SBBS) has been reduced.

• For micro businesses SBBS a life line. Calling on Scottish Government to pass on the 75% relief announced for retail, hospitality and leisure.

• NDR will be fed into finance secretary as per budget. Announced on 19 December.

Next stages from the Fair Work Working Group (FWWG)

TG presented to members the overall outcome to a set of questions that were put to the ILG members for consideration ahead of this meeting.

• ILG members agreed on a charter approach and recommend that the FWWG work on a draft proposal over the coming months.

• ILG members agreed there will be no accreditation scheme.

• ILG members agreed this charter should be aspirational.

• ILG members agreed a fluid 8-12 months’ timescale for publication, aiming for the second half of 2024.

Points raised in discussion

Update from the Fair Work Convention

• The Fair Work Convention are doing research on how best to support the adoption of fair work across the economy in different ways.

• Levers for fair work looks at how government can incentivise uptake of fair work practices for employers.

• This work is looking at the difference between different types of accreditation, charters, toolkits and approaches to support employers.

• An accreditation scheme tends to be a large scale scheme with money attached to it, there is a cost to join and very stringent conditions which participants have to meet, it would also involve an inspection process linked to conditionality.

• Evidence suggests that accreditation schemes tend to favour larger employers.

• Charter schemes tend to be more flexible and therefore appeal to smaller employers as they have less barriers to entry and either little or no cost.

• Evidence suggests that charters work best when there is feedback behind it which can be evidenced. Rather than an accreditation there is usually a kite mark that goes along with charters which is an incentive for employers.

• Needs to be some level of resource behind a charter in order to function correctly.

• Very light touch charters tend to become pledges, this can devalue the charter due to inconsistency between employers.

• Toolkits are a further option, examples include Creative Scotland and Highlands and Islands Enterprise, these set out examples of good practice using case studies, this usually comes with a level of support to help guide employers.

Discussion Points

• Should be certain from the outset that there is very clear messaging from the government to say there is no resource available to fund any kind of accreditation or measuring scheme, need to realistic about available options without funding.

• Encouraged by paper and approach, however need to address issue of true impact.

• FWWG Chair highlighted the desire of being impactful and binding between employer and employee.

• Concern that it must avoid zero measure for employer to improve as this may move away from NSET commitment.

• This should not end up as a virtual document that has no impact.

• Need to use this as a reappraisal to demonstrate that retail is a vital role in society and as part of the economy. Showcase retail as a good place to work.

Scottish Government Fair Work oversight group

• Scottish Government are developing a resource hub for employers on fair work.

• Conditionality has been applied to support schemes government has for business, such as where businesses are looking to access a grant certain conditions have to be met.

• Talks with development of Fair work action plan considering NDR reliefs as an incentive as well as licences to trade being approved.

• Ministers open to these options but no decisions taken as yet.

• Scottish Government have a fair work coordinator in the construction sector.

Minister’s comments

• Charter has to be impactful and make a difference.

• Feels like there is agreement to an aspirational approach and members need to get the process for development correct.

• Need to have a clear understanding of what we are asking resource to support.

• Important that all members note this is industry-led.

• Appreciate the range of challenges faced by businesses, and also understand the Trade Union position of a more binding approach.

Industry Co-Chair’s comments

• This could be a more interactive piece involving toolkits and signposting to resources to help employers improve – more of a learning process to encourage progress.

• Moving forward the ILG need to allow the FWWG to progress in the interests of time and going forward, the work should be done via correspondence with the ILG between meetings.

• Thanked the FWWG Chair and all the members for their work to date.

Actions

• Officials to speak to policy colleagues from the oversight group about the resource hub.

• Officials to approach policy area for information on fair work coordinator in the construction sector.

• Officials to look into examples of toolkits and signposting to resources.

• FWWG to develop a draft proposal for a Fair Work Charter over the coming months.

• FWWG to approach members for examples of good fair work practices/ case studies.

Retail Crime

Study into the characteristics of crimes recorded under the Protection of Retail Workers Act 2021: An update from Scottish Government Justice Analytical Services – Phillip Lamont, Head of Criminal Law, Practice and Licensing Unit.

• The Act provided for a new law to criminalise assaults, threats or abuse aimed at a retail worker who is engaged in retail work at the time of the conduct arising.

• While such conduct was and remains criminal under general laws such as assault, one of the main purposes of the Act was to establish improved information about the extent of such conduct specifically affecting retail workers.

• A statistical briefing paper was circulated to all members in advance of this meeting which included published data on; Police Recorded Crime, Criminal Proceedings and  Research into the Retail Workers Act.

• Scottish Government in partnership with Police Scotland are currently doing a deep-dive into the nature an characteristics of the offences covered under the Retail Workers Act. The outcome of this work is expected to be published in Spring 2024.

• Shoplifting is not covered by this deep-dive, recent data reveals this offence is usually a trigger for more serious crimes. Recorded crimes for shoplifting is up by 25% in 2022-23 compared to the previous year, though remains beneath the level recorded in 2019-20.

• Acknowledge data only provides a partial picture, as this only includes crimes reported to the police.

Summary of the recent SRC meetings with both Police Scotland and the Assistant Chief Constable on retail crime and anti-social behaviour – Lucy Brown, Central Operations Director - John Lewis Partnership.

• Although the first meeting with Police Scotland was less productive, the second meeting with Assistant Chief Constable Tim Mairs was extremely valuable.

• This showed that retail crime is a societal problem and Scotland is no different to the rest of the UK.

• The joint taskforce was discussed which involved the work around the Retail Crime Action Plan.

• There was concern from members about police numbers reducing which means acquisitive crime is only part of what the police have to look at.

• The regional model was covered which also examines organised crime, including people crossing county borders and operating across the country.

• The Pegasus model is a business and policing partnership that will improve the way retailers are able to share intelligence with policing, to better understand the tactics used by organised retail crime gangs and identify more offenders.

• Sharing information is vital, retailers must log and report every incident.

• Going forward bi-monthly meetings to take place in police forum groups.

• Members were reassured by the meeting, but there is still work to do.

Minister’s update from recent meeting with Siobhian Brown, Minister for Victims and Community Safety.

• Government shares concerns of the increase in retail crime and violence towards shop workers and fully understands the serious challenges the sector is facing.

• Those working in our retail sector should be lauded for the important work they are continuing to do during such challenging economic circumstances. They, like anybody, should be able to work without fear of abuse.

• A key part of the Scottish Government’s response to the issue has been to cite their involvement in the Scottish Partnership against Acquisitive Crime (SPAACE). 

• Minister advised that Ms Brown has agreed to attend the next ILG meeting scheduled for March 2024.

Stuart Lewis, Head of Strategy and Collaboration, Police Powers, Scottish Government, gave an overview on SPAACE.

• The SPAACE Strategy outlines a partnership approach to the prevention, deterrence and enforcement around a range of crimes including theft, it is a preventative space which includes Retail and covers shoplifting.

• Conscious of a need to do more in this area and aware of the effect it has on people and businesses.

• Still in the early stages, need to consider roll out, a web presence would be useful. It is a growing area and will update as work progresses.

• Police Scotland has operational independence.

• A direct briefing from Police Scotland to the ILG may be helpful to provide a wider understanding.

Points raised in discussion

• Crime issue has been more prevalent in convenience stores and retailers spending more on prevention efforts.

• Visibility showing the issue is being taken seriously provides reassurance to people working in the industry.

• Although Police Scotland has operational independence strategic police priorities are set by Ministers, understanding that in England police forces have explicit commitment in terms of retail crime.

• Strategic policing priorities are set at a very high level, these are reviewed every three years. This mechanism was put in place by the 2012 Act which ensures that Ministers cannot interfere with the operational running of Police Scotland.

• There is also the Annual Policing Plan which is led by Police Scotland.

• Local authorities deal with local commander and are consulted on the setting of priorities.

• There would be merit in the ILG writing to the chief constable to say members think it’s worthy of consideration to have something about retail crime in the policing plan.

• Retail Crime Action Plan in England and Wales, suggest they may be merit in Scotland having its own Action Plan specific to retail crime, could replicate.

• USDAW have been involved campaigning on this issue for decades.

• Employers have a duty of care under Health and Safety, employees are finding a great deal of comfort in support of employers.

• Staff members find signage within stores reassuring which explains abuse will not be tolerated. Advertising the fact it is a criminal offence is really important, this needs to be highlighted more.

• When the Act was brought in there was a commitment to it being highly publicised to create a cultural change, need to be looking at adverts to create awareness of the impact of these crimes, and make it completely socially unacceptable for retail workers to face abuse.

• There was an event in Edinburgh last Friday by Police Scotland to raise awareness of the launch of Operation Winter City, a campaign to keep people entering Edinburgh and the Lothians safe over the festive period, including our vital retail workers.

• In terms of awareness raising of the new legislation, there was a Scotland-wide campaign to highlight the Protection of Retail Workers law at the time of commencement in August 2021, led by Crimestoppers. However, officials do acknowledge it is an ongoing process of awareness raising and something that can be considered further.

• Police determine severity of harm by using the THRIVE model (Threat, Harm, Risk, Investigation, Vulnerability and Engagement) to access where the greatest need is and where officers should be prioritised.

• Incidents involving physical harm will almost certainly take priority over harm caused by theft.

• Scottish Grocers Federation (SGF) ran the ‘Don’t Put up with It’ campaign between summer and Christmas 2021, in conjunction with the Scottish Government and Police Scotland. (The original campaign was funded by Scottish Government to around £42,000).

• However the government has advised there is no available funding for a rerun of this campaign. (SGF were made aware that the Community Safety budget for this year is already fully committed).

• The incidents of crime and violence occurring presently are the worst ever seen by SGF.

• SGF feel the Retail Workers Act is not being enforced properly and not being taken seriously. Solid evidence of these crimes is available to the police, but it does not seem like justice is being served.

• Concerns raised that retailers provide CCTV camera footage, with names and address of the perpetrator, with witness statements. These often do not get picked up by the Police for weeks at a time. This provides thieves motivation to come into the store again to steal, knowing nothing will get done. Abuse, threats of violence etc. is rife.

• The justice system is broken, with cases taking between 2-4 years to go through. Often, some cases get thrown out as they are time barred.

• The Retail Workers Act has a 12 month time limit to bring cases to court.

• Would be useful to understand if cases have not been able to be prosecuted due to this time limit and engagement with the Crown Office would be useful.

• Substance abuse is a factor, so health interventions are needed.

• People are verbally abusive and taking out aggression on staff.

Actions

• ILG writing to the chief constable to say members think it’s worthy of consideration to have something about retail crime in the policing plan – Industry Co-chair has now drafted the letter, officials have reviewed and Co-chair to issue to the Chief Constable.

• Justice colleagues to engage with the Crown Office to provide further information on time barred cases. It will likely be brought up when Ms Brown attends on 14 March so officials can update members.

• Justice officials to engage with Police Scotland to see if a briefing to the ILG could be provided on SPAACE to provide a wider understanding.

• Officials to check ongoing schemes advertising and promoting action against retail crime, with reference to the Retail Workers Act.

• Officials to approach policy area to consider further funding for the ‘Don’t Put up with it Campaign’ – As the SGF have been advised, whilst Scottish Government would support a re-run of the campaign, unfortunately Scottish Government budget position is the same. There is no funding available across Scottish Government budget lines.

Planning and preparation for future meetings

• Retail crime on agenda as a priority for this group. Scottish Government Justice colleagues agreed to join the next ILG meeting to update members on progress.

• Skills Development Scotland (SDS) will also attend the next meeting, members agreed that the Draft Final Retail Skills Audit and Action Plan be presented.

• Industry engagement has been and will continue to be sought at key stages in the process.  The Retail Skills Audit, the first element of the work, will be shared with members in early January 2024.

• We will also review and discuss the report and conclusion of the recent ILG annual review.

• A “Save the Date” email for the next meeting of the retail ILG has been sent to members. We have diarised this for Thursday 14 March 2024. A formal invite to this meeting will be sent in due course.

Action

• Officials to check timescales on Just Transition/Net Zero plan - Officials understand that summer 2024 deadline for Just Transition Plan is not applicable to Retail ILG but is for other sectoral ILGs currently progressing this work.