Scotland National Strategy for Economic Transformation: industry leadership groups and sector groups - evidence

20. Retail sector

Industry Aspirations to 2030

The industry’s aims and vision to 2030 are that:

• Scotland’s retail sector will thrive through a process of positive change and innovation, to offer people and communities the quality goods, experiences and services that they want.
• the sector will embrace business development opportunities to foster sustainable growth; protect the environment; cultivate entrepreneurship; strengthen supply chains; support wellbeing; and ensure that the retail offers is secure, well-paid and rewarding employment; and,
• the Scottish Government will work in partnership with the sector, trade unions and employees, whose experiences are crucial, to help the retail sector in Scotland become an exemplar for inclusive economic growth and play its part in creating a fairer, greener and stronger Scotland.

Industry Opportunities

The industry has identified a number of opportunities including:

• boosting Scotland’s economic prosperity. As the largest private sector employer, the retail sector is already a major contributor to the economy, with over 240,000 people working in Scotland in 2020 and with an annual turnover of £23.1 billion in 2019;
• an opportunity to improve collaboration, productivity and skills to maximise the retail’s contribution to sustainable economic growth by building on retail’s existing resilience, innovation and entrepreneurship;
• an opportunity to significantly impove equality, tackle in-work povery and support our national goal to reduce the effects of child poverty through the adoption of fair work practices across the sector. Retail offers many opportunities for flexible working and career progression, and continues to employ a high proportion of women and young people, and a diverse representation of groups affected by the pandemic and existing labour market inequalities.
• opportunities for retail to meet the growing global demand for more sustainable goods and services as it continues to flex to meet customer needs.

Industry Challenges

The industry faces a number of challenges:

• it is going through a period of profound change and has experienced challenging trading conditions during the COVID-19 pandemic. While the signs of recovery are beginning to be felt, non-food retail and retail in city centres and shopping centres continue to be particularly badly affected;
• the pandemic has accelerated and exacerbated existing trends, most notably an increase in online shopping - which reached record levels in;
• increasing technology and automation means there are likely to be fewer retail jobs with higher skills requirements in the future.
• the 2020 report from the Fair Work Convention highlighted retail as one of the sectors not performing well across multiple dimensions of Fair Work, with wages, trade union membership and job-related training all showing comparatively low scores for the sector.
• retail is a highly competitive market, with increasing costs associated with inflation and supply chain issues putting pressure on margins. The support landscape also remains complex to navigate.

Ongoing and Planned Activity for Industry

The industry’s planned activity is based around the forthcoming Retail Strategy, which:

• will support the sector to recover and transform over the next five years and beyond, playing its part in creating a fairer, greener and stronger Scotland;
• has been co-developed by a Steering Group of industry representatives, trade unions and academia, chaired by the Minister of Planning, Public Finance and Community Wealth Building;
• has three workstreams that address the following priority themes:
  • SECTOR – supporting COVID-19 recovery and a resilient, productive and profitable retail sector; and helping retail harness the opportunities of digital;
  • PEOPLE - supporting secure, well-paid employment and rewarding careers in retail and promote all aspects of fair work across the sector; developing workforce skills and supporting job transitions; ensuring consumer needs and expectations are met; and,
  • PLACE - strengthening retail’s positive contribution to local economies and communities to ensure a fairer and greener future for all.
• will have Fair Work at its core, benefitting retail business by making them more attractive to workers, and more resilient, productive and profitable;
• will build on pre-existing commitments to produce, in collaboration with the sector, a Just Transition Plan for retail; and,
• will also establish a new sector-led group to take forward actions identified to address the key opportunities and challenges facing the sector.