23% of retail stores 'at risk of closure in next decade'

Tens of thousands of retail jobs are at risk and their loss threatens to hollow out communities, a report warns.

Almost a quarter (23%) of Scottish stores could be lost over the next decade, the Scottish Retail Consortium (SRC) study said.

It warned Scotland is more exposed to the consequences of change in retail than the UK as a whole and is at greater risk of "deleterious outcomes" due to structural reasons.

A "potentially lethal cocktail" of business rates and high employment costs is restricting the ability of retailers to invest in the technology and skills of the future, the report said.

The SRC is calling for urgent action to tackle the challenges, including reforming the business rates system to be simpler, more flexible and more competitive, and lowering the overall tax burden paid by physical retailers.

Andrew Murphy, SRC chairman, said: "Government faces a stark choice. They can create a positive business environment promoting the conditions for constructive investment in business model change and creation of quality jobs, or they can continue on the current path of largely ignoring the systemic problems and allowing increasing costs to fall on retailers.

"Such an approach will curtail investment in stores and result in fewer jobs, hollowed-out town centres and lower tax revenues. This paper sets out the case for a positive economic strategy which will create higher paying, more productive retail jobs in Scotland."

There are currently 252,000 people working in retail, making it Scotland's largest private sector employer, the report said.

However head offices are significantly more likely to be based elsewhere in the UK and proportionately, Scottish retail jobs are therefore much more likely to be based in stores.

The SRC report suggests a range of measures to respond to the challenges, including developing an industry strategy to ensure Government policy engages with the reality of modern retail.

It also called for work to ensure retailers continue to benefit from free trade arrangements with the rest of the EU as well as the UK single market, describing the latter as "hugely valuable" to Scotland.

Minister for Employability and Training Jamie Hepburn 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 have committed £660 million of business rates relief to the year ahead and this month we have also extended the Small Business Bonus Scheme so that more than half of premises will pay no rates at all. In the coming year, seven out of 10 will pay either no or less rates than they did in the last financial year.

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 - has been cut by 3.7% to 46.6p.''