Scottish retailers warn of 'formidable challenges' ahead

Scotland's shops face "formidable challenges" in the coming year, retailers have warned.

Scottish Retail Consortium (SRC) director David Lonsdale said inflation and council tax rises were likely to squeeze consumer spending.

He said retailers also continued to "grapple with a hotchpotch of government-imposed cost pressures".

The Scottish government has said it is doing everything within its powers to help retailers.

Mr Lonsdale called for a "more coherent" approach to policy-making.

In his New Year message, Mr Lonsdale said: "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 Scottish Retail Consortium and government are firmly at one."

Sales uplift

A Scottish government spokesman insisted it has already done much to help businesses such as retailers.

He said: "The Scottish government is doing everything within our powers to support our economy and we welcome the recent uplift in retail sales in Scotland.

"We announced a package of action to reduce business rates as part of the budget. The Small Business Bonus Scheme - which has already saved firms more than £1bn in total - will be expanded from 2017 to lift 100,000 properties out of rates completely.

"In addition, 8,000 business properties will no longer pay the Large Business Supplement and the overall business rates poundage - the core tax rate that applies to the rateable value of business properties - will be cut by 3.7% to 46.6p."

'Cost pressures'

Mr Lonsdale said more could be done by government to reduce the overheads faced by SRC members.

He added: "Retailers themselves continue to grapple with a hotchpotch of government-imposed cost pressures.

"This is set to continue into early 2017 when employers of scale start forking out for the apprenticeship levy.

"This reinforces the need for government at every level to work more effectively with the retail industry to help it keep down the cost of living for consumers and to help it thrive and prosper.

"A more coherent approach towards policy-making in the year ahead is certainly required."

Mr Lonsdale said he hoped 2017 would also bring more clarity on the implications of Brexit and that the Barclay review of business rates would result in a rate reduction to help boost retailers' confidence and revitalise the country's high streets.