Publication - Minutes

Retail Strategy Steering Group minutes: January 2021

Published: 15 Feb 2021
Date of meeting: 20 Jan 2021

Minutes from the meeting of the group on 20 January 2021.

Published:
15 Feb 2021
Retail Strategy Steering Group minutes: January 2021

Attendees and apologies

Attendees:

Steering Group members:

  • Jamie Hepburn, Minister for Business, Fair Work and Skills – Chair
  • John Brodie, Scotmid Co-operative 
  • Lucinda Bruce-Gardyne, Scotland Food and Drink/Genius Foods 
  • Reuben Chesters, Locavore Community Interest Company
  • Tracey Clements, Boots 
  • Robert Deavy, GMB
  • Tracy Gilbert, USDAW 
  • Katie Hutton, Skills Development Scotland 
  • Keith Irving, Castle Food Town Initiative/Irvings Homestyle Bakery Ltd 
  • John Lee, Scottish Grocers’ Federation 
  • Hugh Lightbody, Business Gateway 
  • David Lonsdale, Scottish Retail Consortium 
  • Andrew McRae, Federation of Small Businesses 
  • Lindsay Methven, Scottish Enterprise 
  • Kathy Murdoch, Buchanan Galleries 
  • Andrew Murphy, John Lewis Plc 
  • Emma Parton, The Highland Soap Company 
  • Fiona Richardson, COSLA 
  • Colin Smith, Scottish Wholesale Association 
  • Professor Leigh Sparks, University of Stirling 
  • Anne Buchanan, Enterprise and Innovation, SG
  • Rowan Smith, Economic Development, SG
  • Stephen White, Economic Development, SG

Apologies:

  • Pete Cheema, Scottish Grocers Federation
  • Andy McGeoch, M and Co 
  • Allan McQuade, Scottish Enterprise

Note taker:

  • Ruth Washbrook    

Chairperson:

  • Mr Hepburn

Items and actions

Actions arising:

  • all to read and feedback on terms of reference - by next meeting

Issues discussed

Welcome and Context

Minister for Business, Fair Work and Skills (Minister)

  • welcomed people to the meeting and asked attendees to introduce themselves
  • a Retail Strategy which pre-dates the pandemic was committed to previously but had to be put on hold due to Covid-19
  • Covid-19 has exacerbated existing challenges to retail
  • meeting attendees selected as a cross-representation of retail sector across business, leadership groups, public sector, trade unions. Attendees from urban centres and rural communities with appropriate gender mix, recognising the balance of the retail workforce
  • conscious of need for work to interact with other areas of Scottish Government (SG) work, including regeneration work and town and city centre action plans. Opportunities will be provided to engage with enterprise agencies and other government departments as individual workstreams are taken forward within the strategy

During discussion points were raised about liaison with other government departments. Prof Sparks is chair of the board of Scotland’s Towns Partnership who will be able to provide input at various other stages as required. SG officials provided assurance that there is regular involvement with UK Government and the other devolved governments as part of the Strategic Framework, including a forum for sharing ideas which SG feed into. 

Retail – State of play in January 2021 – long term trends and Covid-19 impacts – Presentation by David Lonsdale, Scottish Retail Consortium

State of play of the industry at the moment. Industry’s economic and social contribution – Retail is one of the largest sector employers with diversity of offers from grocery to fashion retail and is known for its flexibility. Store footprints take many different formats. 

Economic and social contribution

  • 13% of new businesses are retail business
  • 13% of commercial investments from retail industry which include property, logistics, vehicles, technology  
  • £16 million in charitable giving
  • £1,100 invested in training each colleague per year

Trends

  • structural changes – growth of online and click/collect, convenience shopping, rise of car ownership.
  • economic – disposable incomes and household finances/debt, addition to value/bargains, falling shop prices. 
  • regulatory – cost of operating from premises and employing people up, costs of digital routes to market have fallen. 
  • ethical/sustainability – consumer expectations about ethics and sustainability (net zero action road map).

Key underpinning point - sheer pace of the shifts on so many fronts, coupled with retail being a low margin sector which makes for challenging times. 

Covid-19

  • uneven impact across the industry – grocery retailer and online doing well. Non-food retail is a different story. Varies by category, location: fashion is generally doing poorly with tech industry doing well
  • sector had to adapt quickly and industry and people who work in it responded magnificently
  • collaboration on safety protocols
  • Covid has accelerated transformation of the industry – online shopping and declining footfall to the high street
  • majority of sales still undertaken in stores during pandemic (when stores permitted to open)
  • degree of exhaustion within sector due to Covid-19

Retail strategy

  • promote the industry’s economic/social contribution and understanding of transformation. 
  • highlight the industry’s growth potential.
  • coherent approach to public policy.
  • cement needs of consumers at forefront of policy making.
  • clearer understanding of intended regulatory/taxation plans.

Implications for the workforce – Presentation by Tracy Gilbert, USDAW 

  • retail sector significantly impacted.  Welcomes Bill on Protection of Workers (Retail and Age-restricted Goods and Services) (Scotland) passed on 19 January 2021
  • retail was suffering before the pandemic with fall-out of restrictions taking a toll on various sectors
  • non-food stores closing and cutting jobs with big players also shutting down stores
  • attention has focused on helping businesses, but must not lose sight of the impact on the workforce

Essential retailers

  • divergence between essential and non-essential retailers. 
  • the new strain of Covid-19 presents worry for retail workers where there is a real risk and personal cost as they deal with customers.
  • USDAW have called for retail workers and delivery drivers to be included as key workers in receiving the vaccine. Retail workers have supported the community through the pandemic and without delivery drivers there would be no delivery of pharmaceuticals. 
  • working with SG for guidance for retailers - queuing systems, face coverings. Good response from big businesses with reinforcements of measures. 

Non-essential

  • impact on huge number of retail workers who have been furloughed. Many retailers have faced administration
  • retail workers struggling on low pay, with earnings below the median in other sectors for the minimum wage and short hours and contracts
  • urgent measures needed. The job retention scheme exists, but need more targeted interventions
  • clarification required on non-domestic rates relief

Retail recovery plan

  • a vibrant high street is seen as reflection of the town itself, so need to ensure local government can provide support
  • need a plan to focus on retail workers and retail jobs. This needs to include what retail will look like with automation. Retail jobs need to be better with staff development and better pay
  • pandemic has accelerated existing trends. Need to be careful the strategy is not used for short term gains
  • some areas are more urgent than others and this groups needs to work towards trying to resolve some of the crises which lie ahead

Minister

Thanked contributors for presentations which will help inform the next discussion.  

Retail Sector challenges and priorities

Minister

Useful to hear what are the big challenges that are being faced and how we work together. Invited discussion from members on what their hopes were for the Retail Strategy and what they see as the biggest challenges facing the sector.

Kathy Murdoch – Buchanan Galleries

  • city centre is losing out to out-of-town retail sector. Footfall is down drastically and loss of millions of customers
  • customer habits change quickly – need to look at how we get them back and what their expectations are. Shoppers have learned how to spend money on different things and expectations are bigger than before
  • relationships between landlords and retailers is changing, with some landlords offering reductions in rent and service charges to attract retailers
  • safety of retail workers and security teams must remain paramount
  • need to think about how the retail world is changing and what it will look like on the other side

Prof Leigh Sparks

  • social contribution is underplayed and retail has a vital role in relationship between people and producers. Consumers rely on retail as a lifeline for social interaction
  • Social Renewal Advisory Board report and Town Centre Action Plan Review will be important to the Retail Strategy
  • Covid impacts show that community and use of local shops and services has grown through the pandemic – need to think how to encourage this.  Look at the interaction between hospitality and shopping with an opportunity to build on what consumers want
  • how do we think about cities and towns in different terms structurally?
  • given National Outcomes and priorities for SG, Public Health Scotland could be useful contributors to the strategy

John Brodie, Scotmid

  • good government links on the food side could be replicated on the non-food side
  • staff safety is a concern
  • challenge with the economics of doing business in small stores
  • need to be careful that measures to help non-food retail do not to move problems to food areas
  • the high street has less opportunities. Big names required to attract footfall to smaller stores
  • priorities – recognising retail as a great industry which is innovative, a great place to work with opportunities 
  • need to look at the long term future with tangible outcomes

Andrew Murphy, John Lewis

  • welcomes development of a retail strategy. Need collaboration of local authorities and retail to work together for a strategy
  • governments across the UK need to legislate to encourage business place-making and ambitions
  • need to talk and engage with realism focussing on enabling and sustaining businesses and locations that would have a strong future under normal circumstances
  • need to enable big retailers to adapt and change practices. Smaller retailers need support
  • subsectors such as digital have been net winners – look at jobs in those sectors

Robert Deavy, GMB

  • customer behaviour – physical and verbal abuse increasing which is creating anxiety for staff. Creating strain on workforce. Stores have marshals to help but not always sufficient
  • school closures are having a major impact. The majority of retail workers are female so issues exist around childcare. Workers are struggling to get places in schools. If they do not work they do not get paid
  • workers do not feel valued as key workers, they are under rewarded with low pay below the living wage and short-term contracts
  • some large stores have recently agreed to pay their staff the living wage of £10 per hour
  • calls for the vaccine for essential retail workforce who are facing thousands of customers each day

Reuben Chesters, Locavore

  • retail strategy also needs to be about how the retail sector can help deliver good to society through building better places, reaching climate change targets and creating a healthier society
  • development has gone in the wrong direction at times. Some decisions have been anti place-making with large retail parks and distribution centres
  • need to think about how to improve rich and interesting places. With high streets in decline, need radical new approaches. Dumfries has a community-owned high street. Need to shake things up and look at how retail can contribute to society
  • it is more about how retail builds a better Scotland than Scotland building retail back up
  • environmental sustainability needs to include net zero but not be limited to it

Lindsay Methven

  • building on the Place theme, should we differentiate between city, town and local and how we approach this?

John Lee, Scottish Grocers Federation

  • impact of policy is key and how policy in other areas affects retail. For example, how does policy by health or environmental directorates impact on retail?
  • strategy needs to find a way to avoid unintended consequences. Scottish Government directorates need to work together to achieve this.

Lucinda Bruce-Gardyne, Scotland Food and Drink/Genius Foods 

  • observation - for future success, worth reflecting on consumer behaviour that most sales take place in store. People like tactile experiences. Optimising the sensory and emotional experience of shopping could be a factor in encouraging people back into stores by providing experiences that are not available on-line but are trusted and familiar behaviours

Emma Parton

  • agree to long-term recovery and regeneration strategy and tax measures to show Scotland is open for business
  • trust that businesses will re-invest in staff and growth
  • encourage Local Authorities to see retail as wealth creators for their areas and to support accessibility

Tracy Gilbert

  • non-domestic rates relief currently lasts until 31 March. Need clarity beyond this date
  • rent relief – gap extended from 14 days to 14 weeks but due to expire in September
  • strategy should focus on the longer term, however, recovery from Covid-19 is so fundamental to this
  • need a joint solution which is an ongoing issue for all parties

Colin Smith, Scottish Wholesale Association 

  • retail strategy cannot be looked at in isolation, without considering what is happening in hospitality/tourism and the supply chains. Successful recovery of retail is also dependent on and tourism  hospitality and requires the free movement of people to shop and work, see sites, eat, drink and socialise. Challenges identified through the Tourism and Recovery Task force can be transposed across to this group
  • steering group needs to look at supply chains, which need to be resilient, not just bricks and mortar
  • decarbonisation projects need to be considered within proposals too and the impact of policy legislation

Minister

Thanked people for their contributions and assured the group that people can flag issues at any time through SG officials.

Terms of reference

Minister

Asked for comment on the terms of reference.

Tracy Gilbert

Requested additional sentence added to the remit to ‘develop a retail strategy for Scotland’s retail workforce that delivers secure and quality employment.’.

David Lonsdale

Content with terms. Climate change and sustainability mentioned and the report published on net zero. Suggested asking the person who wrote the report to present to the group. 

Recap and next steps

Minister

Summary of discussion:

  • focus on place – to be expected/how we can use that our benefit
  • focus on interaction with other parts of government/wider social objectives
  • how do we make sure there is awareness of impact of other government policies on retail
  • opportunities for retail sector going forward
  • focus on people

Next steps

  • officials to pick up on discussion around activity of the group and the terms of reference
  • officials will be in touch about the next meeting and are happy to received feedback on the regularity of meetings – feedback to SG officials

AOB

Minister

Thanked all for their contributions. Look forward to coming together soon.