Retail improves, but rates burden ‘debilitating’

David Lonsdale

Scottish Retail Consortium director David Lonsdale said shops enjoyed a “modest and welcome uplift in retail sales” in the final few months of the year — but for 2017 he warned about the “prohibitive cost of business rates, which has moved in the eyes of many retailers from irritating to debilitating.”

Lonsdale said much of the data from 2016 on retail sales, footfall and shop vacancies made for sober reading, especially against a backdrop of further shifts in shopping habits and stiff competition.

But he added: “That said, the final few months of the year ended on a more upbeat note with a modest and welcome uplift in retail sales in Scotland.

“In many respects our economy lives or dies by what happens to consumer spending.

“That’s why policy makers should be concerned about the formidable challenges for Scottish retail in the year ahead.

“Rising inflation and council taxes are likely to put a strain on disposable incomes.

“However, households will be relieved by the Scottish Government’s decision not to increase income tax rates, an area on which the SRC and government are firmly at one.”

Lonsdale said retailers continued to grapple with a “hotchpotch of government-imposed cost pressures.”

This would continue into early 2017 “when employers of scale start forking-out for the Apprenticeship Levy,” said Lonsdale.

He added: “2017 will also see the culmination of the Barclay Review of Scotland’s £2.6 billion system of business rates.

“There are few more pressing issues for the industry than the prohibitive cost of business rates, which has moved in the eyes of many retailers from irritating to debilitating in recent years.

“We must make the most of this Review and recast business rates for the decade ahead and substantially lower the tax burden.

“This would increase retailers’ confidence about investing in new and refurbished shop premises, create jobs and help revive our high streets and town centres.”