Retail Sector
The next item of business is a members’ business debate on motion S4M-05350, in the name of Margaret McCulloch, on retail in Scotland. The debate will be concluded without any question being put.
Motion debated,
That the Parliament welcomes what it considers the continued and important contribution that the retail sector makes to the Scottish economy through investment in skills, jobs and local communities, including in Central Scotland; understands that, despite a challenging economic climate, retail remains the largest private sector employer in Scotland, accounting for 240,000 jobs; believes that one in eight Scottish households includes someone who works in retail and that the sector invests an average of £1,275 annually on providing training for each member of staff; recognises that the retail sector often provides flexible employment opportunities for those who would otherwise be excluded from work, including younger people and women, and commends the Scottish Retail Consortium on the publication of Retail in Scotland: The Nation’s Favourite Job.
12:34
I begin by thanking all the members from across the chamber who signed my motion on retail in Scotland and allowed this debate to take place.
As the motion states, retail makes an
“important contribution ... to the Scottish economy through investment in skills, jobs and ... communities”,
not just in my region but across Scotland. Retail accounts for 9 per cent of all employment in Scotland, which makes it the biggest source of private sector employment in the country. The sector continues to contribute to the economy, even in these tough times. However, no one would dispute that retail has been rocked by two recessions and the threat of a third, and by a longer-term shift to online shopping.
Let me be clear: I do not take a rose-tinted view of retail. It is a sector in which levels of pay and union organisation could be higher, but we have to celebrate good practice and recognise investment in the workforce where it takes place if we are to bring out the best in one of the country’s largest employing sectors. That is why I welcome the Scottish Retail Consortium’s report on retail jobs, which provides a snapshot of the retail sector and gives some insight into how employers develop their people.
Before I address the substance of the report, I want to reflect on where the Scottish retail sector finds itself. Consumer spending patterns change over the Christmas period and the January sales, and we had positive sales growth in December, but the overall picture across the year is not as encouraging. Indeed, the SRC has confirmed that sales growth was negative in Scotland in 2012.
Perhaps more worrying is the fact that consumer confidence in Scotland is significantly lower than in the United Kingdom as a whole. That underlines the need to restore confidence in the economy’s prospects and give some semblance of security to hard-pressed consumers if we are to put the Scottish economy back on the right track. However, reports of more high street casualties over the past few weeks—Jessops, Blockbuster and HMV—make it difficult to rebuild confidence in an economy that is simply not growing as it should.
There is an on-going debate about the extent to which retail drives growth and the level to which it benefits from the disposable income of those who are employed in other sectors. However, it is indisputable that consumer confidence has a bearing on retail employment and the sector can go on to contribute more if we secure for Scotland a more confident and resilient economy.
There are good reasons for doing that, which go beyond the normal economic arguments. The retail sector is a flexible employer and many of the part-time and flexible job opportunities that it offers attract women, young people and those with family lives or other commitments to work around. As we have seen, a drop in retail employment adversely affects women and young people in an economy in which they are already at a disadvantage.
In suburban communities such as those that I represent, retail often provides young people with their first experience of the labour market. In the report, major employers such as Boots, Sainsbury’s, John Lewis and Tesco outline how they bring workers into their organisations and develop them. Since the debate was scheduled, I have received communication from Asda, which was keen to brief me on the initiatives that it is undertaking, such as its national skills academy and modern apprenticeships.
In my professional life as a training consultant, I had a number of trainees in retail. It struck me that, with the right people and the right training, someone can progress from an entry-level position to management more easily and much sooner than in other sectors. Indeed, one of the stories in the report is that of Sarah, who joined McDonald’s while still at school. She went on to become a shift manager and continues to progress through that organisation.
When workers have the right mix of autonomy and responsibility, backed up with training, they can go on to become more than just good workers; they can go on to become valued citizens of an organisation. Workers who feel valued and responsible are often among the most productive.
Work in retail is not about the most basic level of customer assistance. It should be about knowing the product and the workplace, so that the worker has the knowledge and skills that they require to be able to anticipate their customers’ needs. Such a workplace culture does not come about by accident; it takes intervention by the employer.
A connected issue is the future of Scotland’s town centres. Last night, there was a meeting of the proposed new cross-party group on towns and town centres. I was overwhelmed by the response that the proposal received. Many contributors to the Scottish Government’s on-going review of town centres attended the meeting. They are keen to open up another forum for debate. Lively discussion is taking place on the issue and contributors include the Centre for Scottish Public Policy, Scotland’s Towns Partnership and Malcolm Fraser and his external advisory group.
Retail is changing rapidly, with consequences for town centres and local economies. In my region, we have town centres that have gained business improvement district status, such as Hamilton and Falkirk, we have covered shopping centres in East Kilbride and Cumbernauld, and we have more high streets and traditional town centres than I could name in the time that I have left. The regeneration of all those town centres is about more than just retail. A variety of uses could help to breathe new life into our precious public spaces. However, town centres will always have to capture some of the wealth and jobs that retail creates, if they are to survive and flourish.
When the report of the Fraser review has been published and the Scottish Government is deciding how to respond, I hope that the Government will take on board the fact that retail accounts for 5 per cent of UK gross domestic product.
I thank all members who are attending the debate. Retail is a vital employer in every constituency and region, so I hope that members agree that today’s debate presents a useful opportunity for us to reflect on how the sector is changing and what that means for employment in Scotland.
12:42
I thank Margaret McCulloch for securing the debate.
People often ask me what I did before I entered politics. After I left school, my first job was in retail grocery. I was fortunate to be employed as an assistant grocery manager for the Bellshill and Mossend Co-operative Society, where I stayed for three years. After that, I moved on to the Dalziel Co-operative Society, in Motherwell, first as an assistant manager and then, after a few years, as the co-operative’s youngest manager, in the Brandon Street branch.
Retail grocery was a job that I really enjoyed. Over the years, I was put in charge of bigger and better shops in Dalziel Co-operative, and eventually I was promoted to assistant grocery departmental manager. That co-operative is now Scotmid. I was in retail grocery until I was 28, when I moved on to another side of retail and credit selling. Working in a shop is certainly an experience.
Retail is the UK’s largest private sector employer, employing 3 million people. In Scotland alone, the sector employs around 239,000 people, or 9 per cent of the workforce—more people work in retail than work in tourism.
The retail workforce is one of the UK’s most diverse. Some 62 per cent of the workforce are women, 13 per cent are disabled and 12 per cent are ethnic minority workers, in proportions that reflect local populations. Just under a third of people in the retail workforce are between 16 and 24 years old. One in eight households has someone who works in retail.
Scottish retail is extremely important to the economy, as Margaret McCulloch said. There were sales of £28 billion in 2011, and more than a third of consumer spending took place in shops. Five per cent of the UK’s gross domestic product is generated by the retail sector. Retail accounts for 20 per cent of turnover and 15 per cent of gross value added in the whole Scottish services sector—higher proportions than in the UK, for which the comparable figures are, respectively, 15 per cent and 11 per cent. Retailers account for 9.7 per cent of enterprises in Scotland. Again, the proportion is higher than in the UK, where the proportion is 9 per cent.
Shopping is something that we all do, whether it is for essential items such as food and clothing, or for leisure goods such as CDs, DVDs and books. Through our experiences in the local convenience store, the nearby supermarket, the high street or online stores, we all have a view on what retail has to offer.
From customer services assistant to fashion buyer, from butcher to store manager, and from fleet manager to food technologist, the sector offers a wide variety of roles, with opportunities to learn. People can learn skills, and can progress within the sector. They really can start on the shop floor and work their way to the top. Many well-known retail chief executives have done just that.
The growth in private sector jobs is critically important to the health of our economy, which is why now is the time to champion the retail sector and what it has to offer. With the support of the Government, retail can grow vital jobs and provide essential services to our communities.
I thank all who have supplied briefings on this subject. Margaret McCulloch mentioned the excellent Asda briefing. The writing is a bit small, so I had better put my other glasses on. Asda is investing in communities and supporting the young and long-term unemployed. It is
“Scotland’s retailer of choice for a vocational career”.
I am an Asda shopper, but I also go into Sainsbury’s and other shops. I compliment all the shops that help people in Scotland.
12:46
I congratulate Margaret McCulloch on lodging this important motion, commend the Scottish Retail Consortium for its report and recognise the important contribution of retail to local communities, training and employment, including flexible employment.
The motion refers to women and young people in particular. I note that 62 per cent of jobs in retail throughout Scotland are taken by women and that almost a third are filled by young people aged between 16 and 24.
As the consortium’s report points out, many young people’s first experience of the world of work takes place in customer service in the retail sector. It provides a great environment, where key skills can be developed. Being able to communicate clearly and concisely, understanding the value of courteous service and working as a responsible team member are all transferable skills that will benefit employees and future employers enormously.
The popularity of the retail sector as chief area of employment in Scotland is reflected in the recent recognition given to employees through apprenticeship schemes, such as the John Lewis programme that is highlighted in the consortium’s report. Those apprenticeships go further, building on the experience learned through employment and allowing employees to progress and feel that they have a stake in the success of the company. A member of staff in Edinburgh named Sarah, aged 21, expresses the view in the report that it is
“a career rather than just a job”.
That shows how truly investing in the development of employees in the retail sector can change mindsets and increase the enjoyment, and indeed the stability, of their position.
The content of retail apprenticeships has been developed following extensive discussions with a cross-section of retailers. The focus is on ensuring that young people gain the core knowledge that is needed to work effectively in the modern retail world. However, there is flexibility in the programme content. Choices are possible within retail apprenticeship programmes to ensure that the programme suits the apprentice’s work role and their working environment.
We must also recognise the challenges faced in the retail sector at present and ensure that the policies that are enacted in this Parliament do as much as possible to strike a balance between protecting support for small businesses and encouraging investment from larger employers, many of which provide the apprenticeships that I have just discussed.
I am very lucky to have a large number of excellent small businesses in my constituency, particularly in streets such as Leith Walk and Broughton Street. Notwithstanding the difficulties that the former has suffered as a result of the tram works, I hope that the reinstatement of Leith Walk that will take place over the next year will lead to those businesses flourishing once again.
Nationally, though, it is not good news everywhere. This week, experts have warned that there could be as many as 40,000 empty shops in Scotland’s high streets in the near future, some of which would be small businesses and some larger. There has already been reference to the fact that long-established high street chains such as HMV, Jessops and Blockbuster have gone into administration in recent months.
In 2006, the City of Edinburgh Council published a review of the key sectors of Edinburgh’s economy that noted that
“retail is central to the revitalisation and renewal of communities in the city, providing a vital community service, a focus for physical regeneration, and sustained investment in people and places. The future success of this sector is therefore central to the future success of the city’s economy as a whole.”
Now, with the council’s publication of “Edinburgh by Numbers 2012/13”, we can see just how crucial the sector is for the regeneration of infrastructure in the capital and as a source of employment and an economic driver. A table in the document registering the number of people in employment in Edinburgh by industrial sector for 2010 illustrates that the wholesale, retail and repair sector employs 36,300, or 12 per cent of the overall workforce. The figures also show that Tesco and Asda are the two retail employers in the top 15 of job creators in Edinburgh.
Edinburgh is a city looking to compete on a global scale; it is home to the Parliament and a successful financial sector and, in the foreseeable future, it is set to benefit from a truly 21st century transport system. I believe that that transport system, in particular the tram, notwithstanding its controversies, will ultimately contribute to the development and success of retail in the city centre.
12:51
Having just heard a little about Edinburgh, members will not be surprised to know that they are going to hear a little about Glasgow now. I thank Margaret McCulloch for raising the issue of retail for debate. I certainly agree that retail is a key part of our economy. It is also appropriate to thank the Scottish Retail Consortium and the John Lewis Partnership for hosting a briefing event earlier this year, at which the minister spoke. I thought that it was a useful evening, with a lot of information and useful contacts from a wide range of backgrounds.
Obviously, I am particularly interested in Glasgow, which is the largest retail area in the UK outside central London. In the city centre, we have both malls and stand-alone shops, and throughout the city we have major shopping centres, such as the Fort and the Forge in the east end. There are also town centres within the city, which we perhaps forget sometimes, such as Partick and Byres Road, and there are also more local shopping facilities.
When we hear about new shops being opened in our areas, most of us are positive about it. Sometimes, we look below the surface at why a new shop is open and find that it is because there is increasing demand and consumption in the area, which is positive and will, we hope, attract more people to the village, town or city where the shop will be. On the other hand, it is not good if people are spending more and getting more into debt, as happened for a number of years, although I hope that that has reduced now.
Margaret McCulloch referred to consumer confidence with regard to shops opening. My only word of caution about that would be that although confidence can be a good thing, if it is wise, it can also be a bad thing, if it is unwise.
Another reason for shops opening is that they are replacing other shops, either in the same or other locations, which are then led to close. That may be good if it provides better choice, more convenience, better prices and so on. We have seen a trend, certainly over my lifetime, of supermarkets replacing smaller shops. However, I do not like the claim that some shops create jobs—okay, some jobs may be additional, but in many cases they are simply replacing jobs in smaller stores. We also see out-of-town developments replacing town centre developments and, within Glasgow, we see Buchanan Street and Ingram Street growing at the expense of Sauchiehall Street.
I am grateful to Asda for its briefing for the debate. I have one of its major stores in my constituency. My impression of Asda and its community involvement is generally quite positive. I quite like the fact that it calls everybody colleagues rather than employees, although everybody will have their own view on that. Asda talks in its briefing about creating jobs across Scotland, which I feel is a little bit disingenuous when in fact it is the same money that is switching from other shops into Asda and presumably some of the same employees—or colleagues—who are moving from other shops.
Perhaps that is just inevitable progress and the way life goes. I am old enough to remember the Glasgow bookshop John Smith, which had been around since Burns’s time—1751, in fact. That business was replaced by a Borders bookshop but, ironically, Borders has now been replaced by Amazon. I liked both the John Smith shop and the Borders shop. However, the temptation nowadays is to use online shopping. Because I am going away for a few days next week, I was looking for a guidebook. I knew exactly what I wanted and I knew that it cost £6.99, but when I looked on the Amazon website, I found that it would cost 1p, plus £2.80 for postage—it is difficult to argue with that.
Retail is changing, but I want to finish on a positive note. I echo the point about getting a foot on the employment ladder. Asda provides an example of somebody who has gone from the bottom to the very top and who is now chief executive of that organisation. Perhaps schools need to do more to show young people that retail is a good career. I welcome the fact that we still have many small family businesses. Probably in every constituency, we still have good local butchers and bakers, although candlestick makers seem to be thin on the ground. Many shops sell Scottish produce, which I welcome. I remember that, when Morrisons came to Scotland, my mother could not get her Baxters soup any more, but I am glad to say that that is a thing of the past.
12:55
I, too, congratulate Margaret McCulloch on drawing Parliament’s attention to the importance of the retail sector to Scotland’s economy. Like Richard Lyle, I earned my first wage in the retail sector. At the age of 16, which was quite a long time ago, I took a Saturday job with one of the retailers that are featured in “Retail in Scotland: The Nation’s Favourite Job”. I worked full time between leaving school and going to university and I seem to recall that my first wage was a whole £9 a week, although it was surprising how many clothes I managed to purchase with my first wage packet.
All three of my children have worked in retail at various times and, as Margaret McCulloch’s motion states, retail continues to provide “flexible employment opportunities” for younger people. As Malcolm Chisholm said, it also develops many useful skills. As well as the customer service skills that he spoke about, things such as the need to be punctual and to turn up for work with a smart appearance are good training for other employment.
Retail is a major employer, with around 9 per cent of the workforce in Scotland and with women and young workers well represented. However, as Margaret McCulloch says, the recession and the ever-increasing use of online purchasing have presented the retail sector with a number of challenges, which have affected our high streets and shopping malls, most recently with the collapse of Comet, Jessops and HMV. The situation was particularly tough in 2012, with Scottish retailing consistently underperforming the industry in the UK as a whole, although sales rallied a little in December, with a positive increase in non-food goods for the first time that year. Total sales were 1.5 per cent up on December 2011, although in real terms that is just flatlining.
We heard from Malcolm Chisholm about Edinburgh and from John Mason about Glasgow, so I will tell members about Gretna. In contrast to the overall situation, the Gretna Gateway outlet village reported its most successful trading year in its 13-year history in 2012, with sales up 3 per cent on 2011 and with about 2 million visitors. The last five weeks of 2012 were the best weeks ever for the outlet village and ended a year that showed growth in 30 successive weeks. Several new premium brands have moved on to the site in the past year. All that is good news for the local economy and for the 400 people who are employed at the centre. In a rural area such as Dumfries and Galloway, a site where 400 people are employed is a pretty major employer.
Gretna is of course world famous for its weddings and for the Gretna Green blacksmith’s shop. However, the outlet centre is proving an additional attraction to the gateway to Dumfries and Galloway. There are probably two main reasons for the success. The first is that the shops sell brand items at a discount and therefore they are competing with online purchases—as we have heard, people can often get things more cheaply by googling. Secondly, the outlet village is well situated, despite being in a rural area, with easy access to the M74, the A75 and the M6. Indeed, there was a long campaign to persuade the former Scottish Executive to amend its signage policy for trunk roads and motorways to enable the outlet village to be signposted from the motorways. As someone who corresponded on that issue with my own ministers over the years, I like to think that that change in policy has contributed to the success of the Gretna outlet village.
Despite all the problems that the sector faces as a result of the tough economic times, retail continues to play an important role in the Scottish economy. As we can see from the case of the Gretna Gateway, the sector can provide substantial employment opportunities in rural and urban areas, especially when those areas are well connected to larger population centres. Our high streets probably face the biggest challenge, through competition from out-of-town shopping malls and online retailing. That is where we need creative thinking on the mix of leisure, business and retail opportunities that can make Scotland’s town centres vibrant again.
12:59
I, too, congratulate Margaret McCulloch on securing this debate. I always think that the Parliament is at its best when its members bring to bear their expertise and knowledge from their previous lives, and it is important to note that nearly 40 members signed the motion.
Malcolm Chisholm told us about the shopping that is available in Edinburgh; John Mason highlighted the facilities in Glasgow; and Elaine Murray spoke about the outlet village at Gretna. Over the years, I have frequented all of those as well as the shops and facilities in Livingston in my constituency. Like Richard Lyle, I believe that shopping is important.
Turning to a more serious issue than my own guilty pleasures, I am heartened by the cross-Parliament and cross-party recognition of the importance of the retail sector not only to our economy but in its investment in skills, jobs and, crucially, our communities. In my constituency, Morrisons runs a great programme that takes primary school children into the store and exposes them to a great learning environment where they can find out not only about food but about the range of jobs that support supermarkets. It is also a great example of the opportunities that are afforded by curriculum for excellence.
There is no doubt that retail makes a significant contribution to our economy and its health is a very visible barometer of the economic climate. Like other sectors, it has had its own challenges, difficulties and, indeed, successes. Unlike other areas, retail continued to grow in the early part of the recession in 2008-09. However, from 2010 onwards, growth was far more modest and, over the past year, it has very much flatlined and now lags behind other areas. That said, the fact that retail sales in December were 1.5 per cent higher than those the previous year will, I hope, give some grounds for optimism.
Retail employs 251,000 people—or 10.2 per cent of the employed population—if we include the owners of shops or retail outlets who actually work in their business. However, I have always been interested not only in the direct employment opportunities that are created by retail; in its briefing, Asda highlights the additional 10,000 jobs that it supports via its supply chain. We must feel heartened when we hear of the Asda store in Forfar that employs the previously long-term unemployed; in fact, 80 per cent of the staff who were recruited for that store had been unemployed.
Malcolm Chisholm and others spoke of the opportunities that the retail sector affords young people and I certainly know that it is very often a young person’s first experience of work. I experienced it myself in my mid to late teens; indeed, I attribute my varicose veins to standing in a shop for many hours. However, we must recognise the range of jobs in the retail sector and the opportunities that are available from entry level right up to graduate level. It is heartening to find that the sector is recruiting on the basis of aptitude and attitude; it is very much a meritocracy, where people such as Andy Clark can rise from the shop floor to become the chief executive officer of a major supermarket.
It is also worth mentioning that Aldi is recruiting 17 and 18-year-olds to train them up as store managers and that, in my capacity as Minister for Youth Employment, I have met representatives of these stores and visited Asda, Tesco, John Lewis and so on. Indeed, one young person whom I met in a major supermarket told me that, if I was serious about youth employment and boosting the economy, I would use the £30 million of youth opportunities funding to build three supermarkets. However, such a suggestion would, to say the least, get me into hot water.
There is no doubt that retail has an important contribution to make as part of the make young people your business campaign. There is a positive business case for employing young people, and the retail sector demonstrates that well.
It is important to recognise that 96 per cent of retail businesses are small. For that reason, the employer recruitment incentive for small employers to employ young people, which will go live in April, is important. As a result of an earlier members’ business debate, I gave a commitment to ensure that all members get good information on the make young people your business campaign and the employer recruitment incentive, in addition to information on other offers that are available locally and nationally, so that MSPs can go out and engage with businesses in their localities.
On the skills agenda, it is important to recognise the difficulties in the current climate. Members have mentioned HMV, Jessops, Blockbuster, Comet and so on. There is no doubt that, as shoppers, our habits are changing, and the fact that online sales have increased presents challenges to the high street. One facility that I would like to emphasise is the flexible training opportunities initiative, which can be used by small businesses for practically any training opportunity that can allow them to retrain their staff. There may well be a great opportunity for small retailers to train up their staff in things such as e-commerce.
However, there is a lot of work to do to regenerate our high streets. The proposed cross-party group on towns and town centres will, no doubt, be crucial in taking forward, among other things, dialogue with the Government on how we can continue to celebrate the successes and push for further success in retail but also reinvigorate our town centres.
13:07
Meeting suspended.
14:30
On resuming—