Retail: The Hammer of the Scots?

June 24, 2019

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Martin Newman

By Martin Newman

The Consumer Champion

It’s a long time since I relocated south of the border. Like so many of my fellow Scots, I don’t quite agree with Dr Johnson that the noblest prospect my countrymen ever see is the high road to England! Despite working in London for so long, I go back to Scotland regularly, and maintain a healthy interest in the state of retail on the Scottish high street.

We’re all one United Kingdom still, and, for the moment, one European Union; so the high street is the same pretty much wherever you go, right? Wrong. All across the continent, but especially in the UK, ‘the high street’ is actually a confederation of microcosms, each existing in its own particular ecosystem, and while there may be features in common, the blend of influences and factors at work will never be quite the same in any two places.

So I wasn’t surprised when, about a week ago, Scottish retail figures for May were announced and we discovered that sales were down a considerable 3.4% on the same month last year. This is not a good time for the Scottish economy as a whole, and it’s no surprise to me that the economic conditions, not least uncertainty surrounding the future of Brexit, are looking pretty bleak.

That said, the picture was not uniform. Thankfully, it never is. Clothing and footwear experienced what the SRC (Scottish Retail Consortium, part of the British Retail Consortium) and KPMG called its “steepest ever monthly decline”, and non-food sales in general dropped by a frankly muckle 6.1%. David Lonsdale, director of the SRC, commented mildly that these were “somewhat bruising figures”. But it wasn’t all bad. There were two noticeable growth areas, and I don’t know what this says about my home country, but sales rose sharply in mobile phones, and cold and cough remedies. We’re getting sicker but we want to tell more people about it?

The retail sector in Scotland isn’t resting idle. As part of its “Clicks and Mortar” initiative, online giant Amazon is opening a pop-up store in an as-yet-unnamed Scottish city, with the hope of attracting more inward investment. Scottish retailers, like their counterparts everywhere, are desperately trying to reinvent themselves, the better and more accurately to reflect consumer needs and wishes. For example, just last year, Bank of Scotland withdrew the last paper £5 and £10 notes from circulation and replaced them fully with more durable polymer alternatives. In Dundee, West Ranga Property Group is hoping to welcome a major retailer to the Murraygate, as well as developing some new residential property alongside – exactly the sort of mixed economy the high street will need as it continues to fight for its survival.

But the overall picture remains, to put it mildly, challenging. Scotland’s businesses are assailed by the twin uncertainties of Brexit and, perhaps, a second referendum on independence from the rest of the United Kingdom. If there’s one thing business hates, it’s uncertainty. Commercially it’s better even to be facing a future you don’t much like than one you simply can’t discern accurately. Where will Scotland be in 12 months’ time, or two years? Will it be using sterling? The Euro? Will it have its own central bank? It’s impossible to say with any certainty – and that’s having a crippling effect on business.

The general trend across the sector is downwards. Business remains more buoyant than in other parts of the UK, but that’s only relative. Political uncertainty and a minority government at Holyrood are hurting the industry. The Finance Secretary in the Scottish Government, whose brief covers a lot of retail and consumer issues, is Derek Mackay, hardly a shining star in the firmament. Scotland lacks a high-profile, clearly focused ‘retail tsar’ who can get a grip on the problems facing the high street in a holistic and cross-cutting way. Something for Nicola Sturgeon to think about? It’s high-impact and high-profile: the high street matters to people, they see it every day. That’s not an audition, by the way – but it’s a heartfelt suggestion. Scotland can do better.

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