Meeting of the Parliament 12 January 2016
I, too, congratulate Gordon MacDonald on securing the debate. I also congratulate all those involved in the launch of “The Local Shop Report 2015”.
The independent retail sector is relatively strong in Scotland, with the highest concentration of such stores in the UK. As other members have said, new businesses are opening all the time. Most local shops are stand-alone businesses or family businesses, with many owners and family members working long hours and taking little time off because of their commitment to the enterprise.
Sadly, hard work alone does not guarantee the success or even the survival of a business. Even long-established independent convenience stores have found the financial climate of recent years a challenge. There are also pressures and temptations arising from the growing competition of supermarket chains entering the convenience store market. Let us take, for example, Kelly of Cults in Aberdeen—a local shop, complete with bakery and butcher’s department, which was run by the same family from 1902 to 2015. The shop is now leased to Sainsbury’s—no doubt a rational business decision for the owners but, inevitably, a loss of choice and variety for the customers.
Sainsbury’s is a good employer, of course. It provides jobs, training and opportunities for its staff, negotiates terms and conditions with the Union of Shop, Distributive and Allied Workers—something that other employers in the sector should also do—and is a popular and successful retailer. However, what supermarket chains cannot provide is the diversity of products for which local shops, such as Kelly of Cults, are rightly known.
The business model of a company such as Sainsbury’s is to keep prices down by procuring produce from a single source; by definition, that reduces diversity and therefore choice. It also has unintended consequences. An example of that was when Young’s Seafood lost the smoked salmon contract with Sainsbury’s. At a stroke, the fish processed at Young’s factory in Fraserburgh lost outlets throughout the UK. This month, as a consequence, more than 150 workers in Fraserburgh have lost their jobs.
Local shops, by contrast, are more able and willing to place orders with local suppliers, which is one of the ways in which they can contribute to their local economies. That is one of the things that is lost when local shops are taken over or driven out of the marketplace altogether.
Another challenge that faces new and existing businesses in the independent convenience store sector comes from the illicit trade in alcohol and tobacco. Sellers of such contraband advertise their products and services through social media, making it difficult for the police and HM Revenue & Customs to track them down. A recent sting operation in Aberdeen, in which hundreds of illegal cigarettes were bought from two different street sellers in just a couple of hours, revealed just how easy it was to access those products and services.
Nevertheless, there has been some success in tackling that trade, including, in September last year, the seizure of 5,000 illegal cigarettes and 3.5kg of tobacco from addresses in Peterhead and Fraserburgh. Continued operations by the police, trading standards and HMRC will go a long way to tackle illicit sales, thereby protecting legitimate business in local convenience stores from that unwanted and illegal competition.
I was interested to note that the Scottish Grocers Federation has called on the Scottish Government to give responsibility for tackling that illicit trade a more prominent role in a ministerial portfolio. That might be a step in the right direction to show the seriousness with which the issue should be taken.
I welcome the debate and the report, highlighting as they do the important role of local shops in urban and rural communities. I hope that enough people will continue to choose to support their local shops for their important role to continue for generations to come.
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