Retail strategy update: statement by Minister for Public Finance, Planning and Community Wealth

Opening Remarks

Presiding Officer, I am pleased to be able to announce the publication of our Retail Strategy for Scotland today.

This strategy recognises the importance of retail to Scotland’s communities, society, environment and economy.

It has been developed in collaboration with business, trade unions, academia and the public sector and I am thankful for the contributions of each person involved.

Our shops often support neighbourhoods and communities – whether in cities or towns, rural areas or our islands where the local shop is often the provider of lifeline products.

They attract people into towns and cities, supporting other economic sectors such as tourism, culture and hospitality.

Retail also offers many people successful and flexible careers. From a first job in a local shop through distribution, supply chain businesses, large stores, ownership or management.

With over 240,000 employees – almost 10% of Scotland’s entire workforce – retail is our largest private sector employer, contributing £6.1 billion GVA to the Scottish economy in 2019.

There are over fifteen and a half thousand retail businesses in Scotland, a growth of almost 2,000 since 2018.

A strong, prosperous and vibrant retail sector is essential to fulfilling the vision of a wellbeing economy as we set out in Scotland’s National Strategy for Economic Transformation.

Challenges

There is no doubt though that our retailers and their staff have had a challenging time over the last two years.

I have been incredibly grateful for so many going above and beyond for their customers and the most vulnerable in society during this exceptional period.

Since the Covid-19 pandemic started, the Scottish Government has done what it can to help businesses, including providing more than £4.5 billion of support.

We are the only government in the UK to offer 100% rates relief for the past two years without any cap and are preventing a cliff-edge return to full liability by extending that support for retail through rates relief for the first three months of 2022-23.

And we are supporting our high streets through the £10 million Scotland Loves Local programme and the £80 million Covid Economic Recovery Fund which encourages people to use and support their local businesses.

The pandemic has accelerated longer-term trends, such as online shopping, sustainable practices and the changing face of the high street.

There remain challenges ahead with staff shortages, rising inflation and the growing squeeze on living standards and business costs as a result of global trends and, of course, Brexit. 

Our retail strategy sets out actions designed to support the sector rebuild after Covid, address longer-term challenges and maximise opportunities to fulfil its potential.

Opportunities

As we have seen during the pandemic, our retailers have been agile and creative in their response to meeting customer needs.

Many have expanded their online and delivery capability.

Many have switched to more ethical and sustainable products, packaging, sourcing and distribution.

There are more retail businesses now than before the pandemic.

That innovative and enterprising spirit will stand the sector in good stead as it evolves to meet the challenges and opportunities of the future.

Having set out in our Strategic Framework Update how we will move beyond the pandemic, the time is right for publishing this strategy.

It builds on the National Strategy for Economy Transformation and Covid Recovery Strategy – setting out a shared vision for retail to become an exemplar for inclusive economic growth and play its part in creating a fairer, greener Scotland.  

Sector

The retail strategy seeks to do this by building on the strengths of the sector - so that it is successful, resilient, sustainable and profitable to the benefit of all of Scotland.

We want to support innovation and entrepreneurship, and seize opportunities from new technologies and markets, to boost productivity and grow businesses.

In this way, our retailers can benefit from and contribute to the bold programme of actions that will transform our economy over the next decade.

People

At the heart of this, and a successful sector, are our people.

As we further orient our economy towards wellbeing and fairness to significantly reduce poverty, we want to make Fair Work and skills development cornerstones of retail in Scotland.

We want all retail workers have fulfilling and secure jobs.

As I said in my statement to Parliament on 24 October last year, “The Retail Strategy will have Fair Work at its core, benefitting retail business by making them more attractive to workers, and more resilient, productive and profitable.”

Unfortunately, employment law is currently reserved to the UK Government. With these powers we could do more to protect and enhance workers’ rights, tackle poverty and increase fairness through legislation.

However, we are determined to do all we can with the powers we do have to make a difference. And I can announce today that we will work in collaboration with the sector and trade unions to deliver a Fair Work Agreement that retailers can sign up to and demonstrate an ongoing commitment to Fair Work principles.

This includes providing good quality secure employment and giving employees an effective voice.

In doing so, I expect employers will take action to improve fair work conditions across retail and contribute to the reduction of in-work poverty.

Retail is a great career choice for many. It offers opportunities for entry into the workforce, career progression and flexible working.

It is vital that our workers have the right skills to have rewarding and secure careers, and to grow businesses.

This means strong customer service skills which drive sales and business profitability.

It also means new skills, for example, to harness the potential of new technology such as self-scan checkouts and online order systems.

That is why we will work with Skills Development Scotland, the Scottish Funding Council and other partners to develop a retail Skills Audit and Action Plan.

It will support reskilling or upskilling as jobs change to meet the needs of retail businesses and the careers of the people they employ.

Place

A further aim is to strengthen retail’s contribution to the economic and social success of our local communities.

Different locations have bespoke needs and our retail sector has a pivotal role in helping to create and maintain successful places.

We know the pandemic has driven down footfall in some places while others – including many local high streets – have thrived.

There are already a number of place-based programmes which support retailers – such as Scotland Loves Local and Business Improvement Districts, which are supported by Scotland’s Towns Partnership.

The actions in this strategy will support our retailers to think local. To work collaboratively in their communities, and support local businesses and supply chains where possible.

To promote town and city centres, and consider creative responses to vacant retail units.

In doing so, we believe that will build greater wellbeing in our neighbourhoods, town and city centres.

A Just Transition

Reducing Scotland’s carbon footprint is essential to achieving our climate change targets and securing a Just Transition to a net zero economy by 2045.

Our retailers have a crucial role in this – through building secure local supply chains, adopting circular practices, increasing repair and reuse options and improving sustainable operations.

Many retailers are already decarbonising their supply chains, setting their own net zero targets and encouraging customers to lead lower carbon lifestyles which is great to see.

This strategy builds on that. We will, for example, develop a Just Transition Plan for Retail that will progress an environmentally and socially sustainable sector in the economy of the future.

Industry Leadership Group

Presiding Officer, this strategy rightly has a strong delivery focus and we as a Government will play our part in that.

However, we cannot – and should not – be the sole vehicle for change. 

That is why we will establish the new Industry Leadership Group for retail. 

Building on the collaboration involved in creating this strategy, the Industry Leadership Group will oversee the development and delivery of strategy commitments, such as those I have just mentioned.

It will focus on the actions in the National Strategy for Economic Transformation that will directly support the retail sector.

The Leadership Group will also agree a Delivery Plan which will include a critical review process and timelines for measuring success.

I will co-chair the Group and look forward to this work getting underway.

Conclusion

The title of this strategy, “Getting the Right Change”, is more than a clever play on words.

Let me be clear – the publication of this strategy is just the beginning.

It is the start of a new conversation with businesses and trade unions, customers and workers.

About how to support our retailers overcome the challenges and seize opportunities as we rebuild after Covid.

About how our recovery should improve the lives of people and their families – people who work in retail, and the customers they serve.

Our vision is for a thriving, successful and profitable retail sector in Scotland that is an exemplar for inclusive economic growth.

This strategy can make that vision a reality and ensure that we do, indeed, get the right change.