Consumer and retailing
Slowdown will concern hard-pressed stores
“The Autumn Statement may have come late this year, but it will affect the political weather in Scotland for some time to come,” he said.
“The Chancellor lauded the strengths of the UK economy, but identified some significant challenges.
“His warnings about rising inflation, higher government borrowing, lower growth, and risks to consumer confidence will be of concern to retailers. In particular the prediction that consumer spending will grow by just 0.8% in 2017, down from 1.8% in 2016 is a real worry to our industry.
“We would urge the Scottish Government to use that funding to also focus on driving productivity in Scotland, in particular by investing in both GDP-enhancing physical and digital infrastructure as well as ensuring Scotland is a competitive place to do business.
“Regrettably, there was little today which will reduce the burdens facing retailers. That’s a concern for retailers facing significant cost increases due to changes in the value of sterling and commodities and frankly government-imposed measures.
“There were some positive announcements which will help family finances, especially the personal allowance and on fuel duty, but with income tax rates now devolved and rising inflation eating into consumer spending power its important Scottish Ministers also keep a firm grip on personal tax rates in next month’s Holyrood Budget.
“Scottish retailers will be looking forward to next month’s Scottish Budget with significant interest. We hope the Scottish Government will look to protect consumers by not raising income tax and support Scottish businesses by reversing last year’s regrettable decision to double the Large Business Supplement.”
“2017 is starting to look like a bleak year for retail in the UK,” he said.
“Combined with the slow down in consumer growth many retailers will be tackling increases in product costs linked to currency changes coupled with an increase in the minimum wage for store workers.
“From our privileged position of working with a wide range of retailers, our advice would be to look at things differently and shift spending, where possible, away from discounting and focus on spending to increase margins.
“Technology has driven dramatic improvements in real time data, enabling smarter more focussed marketing and more timely discounting.
“The real winners in retail in 2017 will be companies that realise this quickly and focus on building long term relationships with customers over short term discounting as a sticky plaster.”