Retail Strategy Steering Group minutes: June 2021

Attendees and apologies

• Tom Arthur, Minister for Public Finance, Planning and Community Wealth
• Andrew McRae - Policy Chair, Federation of Small Business (FSB)
• Chris Brodie – Head of Skills Planning and Sector Development, Skills Development Scotland
• Colin Smith - Chief Executive, Scottish Wholesale Association (SWA)
• David Lonsdale, Director, Scottish Retail Consortium
• Fiona Richardson – Chief Officer, Trading Standards Scotland COSLA
• John Brodie – Chief Executive, Scotmid Co-operative
• Katie Hutton - Director of National Training Programmes, Skills Development Scotland
• Lindsay Methven – Team Leader - Place, Scottish Enterprise
• Luke McGarty - Policy and Public Affairs Adviser, Scottish Grocers’ Federation
• Professor Leigh Sparks, Deputy Principal, Stirling University
• Robert Deavy – Organiser, GMB
• Tracy Gilbert – Deputy Divisional Officer, Union of Shop, Distributive and Allied Workers (USDAW)
• Catherine Brown, Economic Development, SG
• Rowan Smith, Economic Development, SG
• Celeste Wilson - Economic Development, SG
• Elliott Fulton – Economic Development, SG

Secretariat

• Ciara McCafferty, Economic Development, SG

Apologies

• Lucinda Bruce-Gardyne – Board member, Scotland Food and Drink and Founder of Genius Foods
• Kathy Murdoch – Centre Manager, Buchanan Galleries
• John Lee - Head of Policy and Public Affairs, Scottish Grocers Federation (SGF)
• Andy McGeoch - Chief Executive, M&Co
• Reuben Chesters - Project Manager, Locavore Community Interest Company
• Neema Rathod – Policy Advisor, Scotland Office
• Andrew Murphy – Chief Operating Officer, John Lewis PLC
• Emma Parton – Director, The Highland Soap Company
• Carron Smith - Falkirk Council / Scottish Local Authorities Development Group
• Hugh Lightbody – Chief Officer, Business Gateway
• Keith Irving – Chairman, Castle Douglas Food Town Initiative and Owner of Irvings Homestyle Bakery Ltd

Items and actions

Item 1:  Welcome, introductions, apologies

The Minister for Public Finance, Planning and Community Wealth welcomed attendees to the fourth meeting of the Steering Group and his first as the new Chair following his recent appointment. Apologies were noted as above. 

Item 2:  Retail workforce

Tracy Gilbert delivered a presentation on the current issues facing the retail sector workforce.

Key points

• Retail is largest private sector employer in Scotland, providing almost a quarter of a million jobs.
• The sector faced huge structural changes prior to the pandemic but lockdown has exacerbated this.
• USDAW retail members challenges brought on by pandemic include social distancing, bulk buying and self-isolation resulting in staff shortages.
• USDAW members survey showed 9 in 10 shop workers were verbally abused in 2020.
• The re-opening of non-essential retail in April 2021 provided non-food retailers with a boost but will not sustain the sector.
• Reduction in furlough support at beginning of July combined with growing concerns around the new Delta variant is likely to result in further job losses.
• USDAW and Morrisons negotiated an increase in the basic pay rate to £10 per hour but unions want to see a real living wage across the sector.
• Improvements need to be made to basic pay, hours and Statutory Sick Pay to enable retail workers to take time off when ill.
• Need to invest in skills and training for retail workers, with USDAW advocating the need to make the Retail Modern Apprenticeship Frameworks more flexible.
• While Scottish retailers paid over £48 million into the UKG’s Apprenticeship Levy in the last Parliament, retailers and retail workers haven’t seen commensurate tangible benefits.
• Skills Development Scotland (SDS) figures show a 44% fall in retail modern apprenticeships.
• Retail workers face an uncertain future, whether they work in food or non-food.
• The collapse of some of Scotland’s biggest retailers over the past year has led to thousands of job losses in the sector, many affecting women and young people.

Following the presentation, the following points were raised:

• The timeline to  produce the retail strategy should be driven by  getting it right and not rushing to deliver against a pre-set deadline.
• The New Year’s Day Trading consultation opened on 15 June.
• Scope of the retail strategy needs to reflect the sector and the move to online shopping.

• The strategy needs to align with other policies such as Fair Work.
• Development of the workforce needs to look beyond skills and include progression.
• Need to consider the economic contribution of self-employed entrepreneurs and start-ups.

• Important not to neglect the third sector.
• Retail skills are transferrable to other sectors.
• The strategy will need to look beyond the pandemic and factor in what retail will be like in the future.
• 63,600 are on furlough and have uncertainty about their financial future and so unlikely to be spending money that would otherwise support the economy.

• The National Economic Forum contains important themes on building the economy and  Just and Fair Work. It is essential that the retail strategy does not assume a one size fits all approach is applicable.
• Strategy must acknowledge the pace of change and new regulations.
• It should consider FSB manifesto commitments in terms of Digital Boost and big business as well as micro businesses.

• Consider retailers’ costs in light of an increase in inflation.  
• What can be done to ensure people feel safe and confident in taking their own business ideas forward?
• Important to consider the impact of online retail.

Item 3:  Skills and training

Chris Brodie delivered a presentation on behalf of Skills Development Scotland on skills and training for the sector.

Key points

• Pre-Covid Scotland’s labour market faced five dimensions of change: demographic trends, Brexit, industry, net carbon and nature of work.
• Almost 10% decline in GDP from 2019-2020.
• Annual GDP fall in retail of 8.2% - but within this huge sub-sector variations – and shift to online. Pandemic has had a stark impact on large swathes of ‘high street’ retail and on employment
• Across UK, payrolled employees down 168,400 since Apr 2021
• In Scotland 16,600 fewer people on payroll
• As of March 31st 2021, a further 63,600 retail staff still on furlough
• In the short-term, recovery in employment anticipated as restrictions lift through the summer
• However, employment unlikely to recover to pre-pandemic levels, and may decline again from 2025/26
• Only 45% of retail staff had received training in 2019 v 55% for all sectors
• In 2017 more than 60% of retail staff received training (v 62% in all sectors)
• Use of apprenticeships was falling sharply pre pandemic:  from 2,260 (2017) to  1,700 (2019)
• Only 520 apprenticeship starts in 2020
• Potential issues to explore –
  • What the implications of changes for jobs and skills?
  • Is there a clear strategy to support growth/change?
  • What skills will be required to support future growth/change?
  • Where are the skills shortages anticipated?

Following the presentation, the following points were raised:

• There are early signs of shortages in the supply chain of food production and distribution.
• There is a reduction in Modern Apprentice uptake.
• In south of Scotland the number of vacancies was above pre-pandemic and Brexit levels.
• Furlough ending – we can expect an upturn in unemployment.
• There is an opportunity for upskilling/retraining approach for the strategy.

• Retailers are struggling to fill vacancies.
• Furlough means staff can get 80% of wages, while a new job with another company carries risks as if the company failed they would lose money. Many people are struggling in relative poverty.

Item 4:  Workstream groups

Mr Arthur updated that the three Workstream groups of People, Place and Sector had recently met and Rowan is currently collating proposals.

Item 5:  Recap and next steps

Mr Arthur provided a summary of discussion and thanked the group for their contributions.