Experts warn of challenging conditions
MSPs from across Scotland’s political parties have been warned that conditions are harder than ever for c-stores.
The Cross Party Group for Independent Convenience Stores heard from several industry experts at the group’s latest meeting in the Scottish Parliament, and the picture painted wasn’t a particularly pretty one.
Rachel Lund, head of insight and analysis at the British Retail Consortium said that retail was “going through a very challenging time,” with some media reports suggesting it was a period of “armageddon.”
“The fact is that average profit margins in the retail industry have fallen,” she said.
“Retail has seen declining revenue growth for a long period, and at the moment, trend growth is possibly at one of the lowest positions it has been for a while. So if you are a retailer, your market is now growing at a lot slower pace than it has done historically.”
The issue of increased competition was another problem highlighted by Lund, who said that “incredibly strong” competition had pushed down prices and reduce revenues for retailers.
“Prices in shops, until last month, have been falling for the past five years,” she said.
And along with changes in pricing and profits, growth in the online market has created further challenges for retailers.
“The internet has massively transformed the retail industry,” said Lund, “and the growth of online has meant we are making fewer visits to shops. Our data suggests that over the last four years, footfall has fallen by 6%.”
However, Lund pointed out that physical retail stores will always be needed in some form.
“There are just things that stores do better than online. We go shopping when we have forgotten milk and we need to make a cup of tea, hyperconvenience, online can’t help with that. You can get same day deliveries from some retailers, but it can’t help instantaneously. Convenience is actually a growth area in retail.”
Yet despite the importance of physical stores to society, many shops have been hit hard by business rates over the last few years.
Stephen Burnett, managing director of The Retail Data Partnership, also addressed the Cross Party Group, and said that he thought the business rate changes had been “absolutely extraordinary.”
“I think it is absolutely bizarre that you would tax people on a property value rather than on the value of the business.
“The rates go up, and then there is the business of challenging the rates and getting them re-rated and then they come down again – what a massive waste of time,” he said.
In slightly brighter news for c-store retailers, MSP Daniel Johnson updated the group on his Protection of Workers Bill and said that he hoped to have draft legislation before the parliament by Christmas.
He also pointed out that there was an amendment proposed to the UK Offensive Weapons Bill, which would make it a specific offence to obstruct a shopworker in their duty to enforce the law on the sale of offensive weapons.
He said this may fulfil some of the aims of his bill.
