Chamber and committees

Adrian, you mentioned that the cuts change your attitude towards investment and so on. What is the change in your appetite to risk? If your budget continues to be cut, because of cuts in financial transactions funding, what impact will that have in relation to losses, since there will be the occasional loss from investment from time to time? Do the cuts affect your attitude to risk and does your knowing that your budget is being cut mean that you then have to reassess a lot of potential investments?

Thanks very much.

I thank members on all sides of the chamber who supported my motion in order that it could be debated tonight. I refer members to my entry in the register of members’ interests, as I am the convener of the cross-party group on independent convenience stores, of which the Scottish Wholesale Association has been a member since the CPG was formed. I also thank, from the Scottish Wholesale Association, Colin Smith, who is in the public gallery tonight, and Jayne Swanson for their knowledge and guidance on the vital role that the wholesale sector plays across Scotland.

The Scottish Wholesale Association is a not-for-profit membership organisation based in Edinburgh. It was established in 1920 and is the official trade body that represents food and drink wholesalers and distributors. Wholesale members of the association are located the length and breadth of Scotland, and they include single-depot, family-owned businesses as well as national wholesale groups. Members supply products to Scotland’s 5,000 independent convenience stores and its 30,000 catering, hospitality, tourism and leisure businesses, as well as to all other public sector establishments.

The Scottish wholesale sector is a vital part of the Scottish economy: it is worth about £3.3 billion in the wholesale marketplace and directly employs more than 6,000 people. Wholesalers across all parts of Scotland support more than 49,000 local jobs in the independent convenience store sector. Those local jobs help local people into work, from a first job for a young person to a job for an older person who is returning to work.

The economy benefits from people shopping local and buying local produce, because producers and retailers not only provide jobs in their businesses but support employment across the town or city in which they are located, through the use of local tradesmen, produce suppliers, shop fitters and garages, as well as local legal and accountancy firms.

The link between wholesalers and local convenience stores is not always clear, but members will recognise the trading names, which include Mace, Spar, Londis, Costcutter, Premier Store and Nisa, to name but a few. Those symbol groups and cash-and-carry operations support family-owned stores to compete with the large multinational supermarkets in many of our towns, villages and neighbourhood centres.

However, wholesalers face not only competition from supermarkets but other challenges such as the restructuring of the grocery market, with the market being impacted by Amazon moving into selling groceries, wholesaler bypass, changing customer demands, Brexit and regulation. That is all happening at the same time as the wholesale sector is facing low margins, recruitment issues and rising food costs. The result is a lack of private investment, due to low investor confidence in the sector, at a time when there should be investment in operational efficiency and supply chain management.

I recently visited Mark Murphy Ltd, which is part of Dole foodservice, at its warehouse in Bankhead Way in my constituency. It is Scotland’s largest fresh produce supplier to the hospitality sector and is among my constituency’s biggest employers, with approximately 270 members of staff.

I met general manager Brian Breslin, who outlined to me not only the positive contribution that the company makes to fresh produce supply across Scotland, as the United Kingdom’s foodservice supplier of the year for 2023, but the challenges that the business faces, predominantly in the recruitment and retention of staff. Despite offering rates above the minimum wage, as well as fixed shifts and permanent contracts, it continues to struggle to fill positions, given the employment situation in Edinburgh.

That was reflected in the results of the Scottish Wholesale Association’s recent wholesale market survey, which indicated that recruitment and skill shortages remain a problem. However, the industry is trying to address that by taking steps to improve working conditions, including by introducing the real living wage and a four-day week. The sector has received and continues to receive, both during and after the pandemic, financial support from the Scottish Government totalling approximately £20 million, as the Scottish Government recognises the vital role that the sector plays for our food and drink suppliers and for us as consumers.

In 2021, the Scottish Wholesale Association launched its delivering growth through wholesale training initiative, with the aim of educating and engaging with producers to highlight the opportunities that the wholesale sector provides. The training programmes were designed by the SWA in conjunction with the Scottish Agricultural Organisation Society and Scotland Food & Drink. Supported by the Scottish Government, the initiative equips local Scottish producers with the insight and strategies that are needed to successfully navigate the Scottish wholesale landscape. The result to date is that almost 150 Scottish producers have gone through the course, with 230 new Scottish product listings via 59 wholesale partnerships.

Furthermore, the Scottish Wholesale Association has launched two additional initiatives, with support from the Scottish Government as part of its wider “Local Food for Everyone: Our Journey” strategy. The first initiative is a wholesale local food champion training programme, which was introduced in 2023. The local food champion programme is an extension of the SWA’s delivering growth through wholesale producer initiative. The programme provides training to those who work in wholesale businesses to equip them with the knowledge that they need to take responsibility for shaping their company’s local sourcing strategy. By becoming a champion, of which there will be 40 by November this year, they are taking an active role in creating a strong and sustainable local food and drink supply chain.

The second initiative is the Scottish wholesale local food and drink growth fund, which is worth £195,000, thanks again to Scottish Government funding. That is the third phase of the delivering growth through wholesale local sourcing programme that I mentioned earlier. Again, through working with partners, the initiative has been set up to support wholesalers who work closely with local Scottish producers, manufacturers, local authorities and other stakeholders to increase the volume and customer base of Scottish produce that is sold through the wholesale channel.

In closing, I highlight some of the findings of the Scottish Wholesale Association’s recent market survey. There has been positive growth in the sector in 2023 in comparison with 2022, with an average of a 5 per cent increase in turnover. Wholesale service is up by 9 per cent in comparison with 6 per cent in the rest of the UK, and there has been a very positive 30 per cent increase in turnover from Scottish products, thanks to initiatives that are funded by the Scottish Government and delivered by the Scottish Wholesale Association.

I put on record my thanks to the Scottish Wholesale Association for its collaborative approach in working with the Government and industry to ensure that the sector is nurtured and supported for all stakeholders.

Retail Economics and Tradebyte have reported that British brands and retailers have seen international sales to the European Union plummet by almost £6 billion since Brexit. Can the minister provide any update on what assessment the Scottish Government has made of the continued cost of Brexit to business?

I thank Sharon Dowey for securing this important debate on retail crime. I bring to the attention of the Parliament the fact that I am the convener of the cross-party group on independent convenience stores. On Tuesday, we had presentations from organisations and retailers on this very subject. I take this opportunity to thank John Mason, Foysol Choudhury and Murdo Fraser, who attended and discussed the subject with more than 20 representatives of the sector.

There is no doubt that shoplifting is on the rise across the United Kingdom, with the British Retail Consortium highlighting that there were 5.6 million incidents of shop theft recorded in 2023, compared with 1.1 million in 2022. Over the past 10 years—since 2014—there has been a 41 per cent rise in shoplifting in Scotland, costing store owners anything between £5,000 and £12,000 each year.

The Scottish Grocers Federation’s Scottish crime report for 2023-24 suggests that cases of shoplifting have doubled in the past year. The report highlights that many retailers are reluctant to report cases of shoplifting to the police due to slow response times, which undermines the effectiveness of reporting the crime and solving it.

A constituent of mine who attended the cross-party group meeting on Tuesday night highlighted that, on top of the regular cases of shoplifting, they had, for the first time in more than 20 years, been robbed of a large quantity of high-value goods while the store was open. They had to wait more than a week for the police to attend. Another retailer highlighted how two incidents back in 2016 had had a traumatic impact on their health. That was because they had been broken into overnight twice in a 21-day period, when organised crime gangs stole high-value items. They then had to bear the cost of carrying out repairs and the expense of upgrading security, only to find that their insurance companies would not pay out. The result was that the cost was borne by a family business that provides a service to the community and employs 16 people. Shoplifting or theft is not a victimless crime.

Another aspect of retail crime is the threat of violence. The Association of Convenience Stores reported that, in the past year, there were 76,000 incidents of violence and 1.2 million cases of verbal abuse across the UK. One of the ways in which we have tried to address the issue in Scotland was thanks to the Scottish Grocers Federation, which, working across the political spectrum, put in place the Protection of Workers (Retail and Age-restricted Goods and Services) (Scotland) Act 2021, which came into force in August 2021. We now have a record of the number of cases of abuse, threats and violence towards shop workers in Scotland—but that is not enough.

While I welcome the fact that there are 20 per cent more police officers in Scotland than in England, and 22 per cent more than in Wales, we need to do more. On Tuesday, the cross-party group highlighted a number of actions that could be taken to help retailers to combat shoplifting. One is to establish a self-reporting scheme so that low-level crime is measured, highlighting hotspots and helping retailers to support each other and to be on the alert when incidents happen in their neighbourhood. A second is to investigate the possibility of introducing small grants to independent convenience stores to partly cover the cost of better security, which will help to deter crime. A third is to revise the guidance on the use of CCTV covering the front of premises in order that cameras are more effective in gathering evidence and can be used as a deterrent to would-be shoplifters.

Across the shopping areas in our towns, villages and neighbourhoods, local people are dependent on the independent convenience store sector to provide the everyday necessities of living in the area. We need to address shoplifting in our communities before it becomes an epidemic and threatens the viability of many of those stores.

Professor Bell, I would like a bit of clarification on something that you said earlier. You said that, if we get the market design right, we should see lower electricity bills, but electricity is traded on the wholesale market. If you look a year ahead, you see that prices are 5 per cent higher than they currently are, and the UK Government has guaranteed Hinkley Point a price of £92.50 per megawatt hour, which is 12 per cent higher than the current spot price in the wholesale market. What do we need to do to change the market design, and how do we go about it to get lower bills?

The Labour Government’s austerity budget that is due in October is expected to have a substantial impact on the Scottish Government’s finances in the year ahead. Can the cabinet secretary provide further assurances that, despite the cuts that are coming from Westminster, the Scottish Government will continue to invest in the arts and culture sector? Will he provide an update on his latest engagement with the UK Government regarding future finances and the impact that its decisions will have on the Scottish Government’s spending plans?

There is no doubt that it is important to encourage people to come to the country in the first place but, in your strategic pillars, you say that you want to encourage people to

“spend more time and money across Scotland”.

You also say that you have to manage overdemand, make sure that visitors are safe and manage those visitors. However, you have lost all local knowledge. You have no local presence.

How do you spend your marketing budget?

I have one last question, which is to do with the quality assurance scheme that you have had for businesses. If my understanding is correct, that is coming to an end. Many visitors will be looking at bed and breakfast accommodation, hotels or decent restaurants, but if you guys are removing your quality assurance programme, how will they get independent advice on where to go and, more important, where not to go?