Hansard

I welcome to the Scottish Parliament members of the Scottish Grocers Federation who are in the gallery tonight, and I thank John Lee of the SGF for his assistance.

Last October, the Scottish Grocers Federation launched the first ever report on the importance of convenience stores to our villages, towns and cities. The introduction states that the report is the

“richest ever picture of the economic and social value of local shops”

in Scotland. The report, which was produced by the SGF in conjunction with its sister organisation in England and Wales—the Association of Convenience Stores—found that convenience stores often provide the only local shopping option for rural communities, while those in urban areas serve as part of the mix of stores that serve the needs of the people who live and work in our communities.

The report found that 75 per cent of the 5,602 convenience stores in Scotland are run by small business owners, that the sector provides 44,332 jobs, and that their value to the economy in terms of gross value added is more than £0.5 billion per annum. With one convenience store for every 946 people, Scotland has more such shops per head than any other part of the UK.

We have read in the newspapers recently that some retailers are going through a difficult patch, with at least one high-profile casualty being announced in the past week. A PricewaterhouseCoopers report for the first half of 2015 highlighted that five high street stores were closing every week in some of Scotland’s largest towns and cities. The figures highlight that stores that are owned by multiple retailers have shut up shop with not enough new openings to prevent a net reduction, and PWC highlighted that store portfolios continue to be

“reviewed and streamlined in response to the relentless advance of online shopping”.

How has that affected convenience stores? The report highlights that there are now more stores than there were in 2014, with a net growth rate of more than one new shop per week, which has provided more than 2,000 new jobs during the past year. Overall, sales are up 5 per cent year on year as a result of an increase in average spend, of more couples with young children using the stores, and of the increasing frequency of visits on foot to the local community store.

The range of services is increasing, which is helping to drive the increase in footfall, with many convenience stores offering mobile phone top-ups, bill payment services, free-to-use cash machines, community notice boards and cold food to go. Social media are helping convenience stores to take on the major supermarket chains with special offers and events being advertised via Twitter and Facebook.

The report found that another possible reason for the positive figures is the fact that 87 per cent of Scottish retailers engage in some form of community activity, with more than eight out of 10 collecting money for local or national charities, one in three providing funding or support to community events, and one in four providing sponsorship to local sports teams.

It therefore comes as no surprise that of the 12 types of retail outlet that are present in our communities, convenience stores were voted second by consumers in a ComRes—CommunicateResearch Ltd—poll in 2015 in respect of which have the most positive impact on their local area. That involvement in the community and the range of services that are provided are what help to create customer loyalty.

Customer loyalty encourages a new generation of young entrepreneurs in new store openings, with a 33 per cent increase since 2014 of business people below the age of 30 opening and owning convenience stores. The report found that the sector is very entrepreneurial, with 65 per cent being the first person in their family to own or run a convenience store in Scotland.

That does not mean that no issues need to be addressed in order that such success can continue. Small independent retailers are under immense pressure to maintain margins and profitability so that they can have the funds to reinvest in their business. Many store owners have embraced new technology and installed LED lights, smart meters, chiller doors and so on in order to cut overheads and compete with the supermarkets.

That drive to efficiency is being assisted by the Scottish Government’s environment agency, Zero Waste Scotland, which has made available a fund of £100,000 to enable convenience store retailers to carry out energy efficiency refits. That has proved to be highly successful and many SGF members are keen for it to continue.

Then, there are the issues that lie outwith the retailers’ control but which impact on the viability of their stores. Although the report found that 58 per cent of convenience store customers travel on foot, 38 per cent drive to their local store. Parking problems impact on local shops, which means the loss of passing trade or impulse buyers. That is being evidenced in my constituency. I understand that lack of car parking provision by Edinburgh Napier University at Sighthill means that more and more parking in the adjacent local shopping and residential area is being used by students, which is resulting in a reduction of passing trade to local shops and is making it difficult for residents to park adjacent to their homes.

There are also the increased rents and non-domestic rates that are demanded of small retailers, which do not reflect the difficult trading circumstances that many find themselves in. Retailers in my constituency inform me that the Scottish Government small business bonus scheme has been welcome in its giving 100 per cent relief to properties with a rateable value of up to £10,000, and a sliding scale of discount for properties with a rateable value of up to £18,000. Across Scotland, 92,000 small businesses—many of them local convenience stores—have had their rates abolished or substantially reduced.

In August 2014, during the first ever parliamentary debate on the importance of convenience stores to our local economies, I quoted the Carnegie UK Trust, which stated:

“We recognise that for many towns, the contribution of independent retailers is a crucial factor in the long-term sustainability, diversity and vibrancy of high streets.”—[Official Report, 19 August 2014; c 33651.]

“The Local Shop Report 2015” confirms and justifies the view of the Carnegie UK Trust that the long-term sustainability, diversity and vibrancy of high streets is down to local shops and the convenience store sector.

I urge members to pop in to committee room 1 on Thursday, where they can not only pick up a copy of the report, but can discuss the findings with a number of retailers from across Scotland.