When costs keep rising, something has to give

Antony Begley

It’s a simple fact that the cost of doing business just keeps on rising in local retailing, and that cost is rising far quicker than most retailers are able to easily cope with. With margins being constantly eroded and competition reaching an unprecedented level, how exactly are retailers supposed to maintain successful, profitable businesses?

This month’s cover story goes into great detail about the increasing cost of business but few retailers will need reminding of the increasing burdens of the minimum wage, rates, utility bills, stakeholder pensions, waste disposal and a plethora of other costs which only ever seem to move in one direction. And that’s before the impacts of reduced margins on many services and products and the constant downward pressure on margins caused by an industry-wide long-term commitment to the likes of deep cut promotions and £1 price marks. I’ve lost count of how many times the buy-price of products we buy for Woodlands Local has risen yet the price to the customer remains the same. So who loses out? Only the retailer.

And the harsh reality is that probably 80% or more of our annual sales in Woodlands Local are of products that don’t even deliver a margin of 10%, and often far lower than that.

This model is not sustainable.

It can be very frustrating to listen to everyone from the Government to the man in the street repeatedly saying how much they value the local retailing industry, how important it is to the fabric of every community in this country and how vital is to the wider Scottish economy. Yet very rarely does that translate into action that positively impacts upon retailers.

If all of these stakeholders genuinely mean what they say then the time to put their money where their mouth is is now. It’s extremely telling that incoming SGF President Dennis Williams outlined in SLR in his very first interview as President how his biggest concern of all was addressing the increasing cost of business for local retailers.

The Cross-Party Group on Independent Retailing is one of the most important media we have for influencing the Scottish Government and ensuring the decision-makers understand the plight of retailers. I would urge you to get involved and help make our voice heard. If the Government wants a sustainable, long term independent retailing trade serving every corner of our nation then it’s time they accepted the commercial realities and created a playing field that gives our industry the chance not just to survive but to flourish.

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Antony Begley, Publishing Director