Shopping: the cost of living crisis – Q&A with The Conversation

In between graduation ceremonies last Friday (as we caught up with the pandemic impacted ceremonies of 2020 and 2021), I was interviewed by Steven Vass of The Conversation about the cost of living crisis and Shopping. The result is a Q&A piece which was published last Friday and which I reproduce from The Conversation below. Some images and a couple of links are not reproduced here, so please go to The Conversation source material for the full version as Steven intended it.

On top of rampant inflation, strikes, business gloom and rising interest rates, bad news about our shopping habits was all but inevitable. The volume of goods being sold in the UK is now falling, according to the latest monthly data from the Office for National Statistics (ONS), with food purchases the number one culprit.

Consumer sentiment is at record lows for the second month running, according to the closely watched GfK consumer sentiment survey. People are now more downbeat than in the depths of COVID or even during the global financial crisis.

With the UK economy already apparently in the early stages of a recession, we asked retail specialist Professor Leigh Sparks from the University of Stirling for his perspective.

What’s the big picture?

Times are hard as people start to feel the effects of the soaring costs of consumer goods, energy and petrol – it was £1.97 for a litre in Stirling this morning. If you’ve seen a decline in your benefits, or you’re paying more in national insurance, or your pay is not keeping up with inflation, your income has reduced. This has been a multiple shock for people – in a very short period of time.

In food in particular, patterns are beginning to shift. We’re seeing tighter budgets – for example reports of people putting things back at checkouts when they reach £30 in purchases. There’s some evidence of people switching to cheaper brands and stores. Convenience stores are doing far better than big stores, as consumers search for bargains and value. Also, ONS retail sales figures are often revised downwards.

Why are food purchases driving the drop rather than optional items?

Because the cost of living is hitting people very urgently and directly. Food is a much bigger percentage of retail sales than other categories, and the cost is going up rapidly. Anything grain-related is being hit by Ukraine. The farm-related agriculture index is showing ridiculous spikes.

Heatwaves in places like Spain are not helping. Some British facilities, which grow a lot of the country’s greenhouse tomatoes, peppers and so on, didn’t switch on this year because energy prices were rising so fast.

Overall sales volumes in non-food are unchanged in the ONS data, but it varies considerably between categories. Clothing has increased, though that may well be seasonal. It’s being offset by falls in household goods, furniture and departure stores – big purchases are being postponed.

How does this compare to previous crises?

The 40-year high in inflation and the consumer sentiment lows in a survey dating back around 50 years tells you these are very difficult times. It has also come on the back of the pandemic, Brexit and a decade of austerity. People are far less resilient as a result, so it’s affecting them more quickly than it might have done.

The energy price spike is comparable to 1973 and inflation was close to 20% in the early 1980s, but consumer behaviour is currently being affected by fears about what comes next. If the supply of products remains a problem because of the pandemic, war and global warming, what then?

The GfK data shows that consumers are feeling negatively affected already, but the bigger negative for them is the macroeconomic situation in 12 months’ time. They look at the sheer acceleration in the cost of living and worry it will continue.

Is consumer sentiment too negative?

There may be some excessive negativity around the macroeconomic outlook. At the Tiverton and Wakefield by-elections in the UK, lots of voters were reported on their doorsteps as saying that the government is doing nothing about the cost of living. It’s hard to know if that’s being over-emphasised by the media because it fits the present narrative, but people certainly have reason to worry.

The geopolitical situation might make things worse, particularly when winter comes and demand for energy goes up. I would also point to the massive use of food banks: the number of people struggling at the lower end has been steadily increasing, so they are starting from a low base.

Which retailers will be winners and losers?

The cost of heating, lighting and power for retailers is going up. And unlike for households, there’s no energy price cap to help businesses. So now that consumers are also cutting back, all the calculations for retailers about cost vs income are changing.

Budget retailers like Aldi, Lidl, Home Bargains and B&M are going to benefit. Among other big retailers, those that will hold up best will be those that give good discounts such as through loyalty cards or value/own brand products. In categories such as furniture, household and big purchases, there’s an opportunity for retailers offering good prices – Dunelm, for example.

Aldi is tipped to overtake Morrisons as the fourth largest supermarket chain in the UK.

Where it becomes difficult to comment on individual retailers is because you don’t know their stock position. Many might have stock hangovers from COVID, and are therefore carrying high capital costs. They will have difficult decisions to make about offloading it, so there could be some real bargains for consumers.

Do we expect collapses?

There has been a shakeout in recent years of companies that either built too many stores or had high costs or just weren’t that good. So there may be casualties or there may not be.

Most management teams have never had to trade through high inflation. How quickly teams adapt will be the difference between surviving and not surviving. For example, high inflation changes how you have to manage cashflow. It changes the price at which you buy stock, how long you are willing to hold it for and how much you are willing to pay for storage.

Is there an optimists’ case?

There are still people who have money and are looking for interesting things to buy. During the pandemic, we’ve also seen good performances from local independents, and people thinking local, acting local and spending local – those are bright spots.

More generally, if we get on top of energy costs, including petrol, that would be a big shift: it would make consumers more positive and bring down inflation, and therefore some of the narrative would improve.”

Posted in Consumer Confidence, Consumers, Cost of Living, Discounters, Food, Food Banks, Food Retailing, Inflation, Local Retailers, Office for National Statistics, Pricing, Retail Sales, Retailers, Shopping, The Conversation | Tagged , , , , , , , , | Leave a comment

Departing Stores and Place Vandalism

Loss of local identity is a powerful factor that can influence the social and economic wellbeing of a town. By preserving the fabric of distinctive historic buildings, particularly those as prominent as former department stores, residents can recover a sense of connection and continuity … The loss of these buildings concerns not just their inherent architectural and historic value, but the shape of daily life” (Departing Stores, 2022, p12-13)

Readers of this blog will be aware of the successful campaign to protect and save the Three Ships murals in Hull.  These wonderful pieces are iconic components of a place and their loss would have been place vandalism at its worst.  The murals were once part of a department store building.  Not knowing the store, I can make little comment about its merits, but department stores were often very well designed and built stores, architecturally interesting and important and became a key feature of a street or a town.

This came to mind recently as a furore continued around the proposal to demolish the Marks and Spencer store in Oxford Street and replace it with a new build mixed use development (see my earlier brief piece).  That Oxford Street store is iconic in its design and place and there was a (predictable) outcry.  From a distance it was hard to work out the balance of concern; was it for the beauty and design of the original, or was it disgust at the perceived mundaneness of the replacement? Whichever, the destruction of a sense of place was apparent. The saga rumbles on.

The questions the proposed demolition and rebuild anew in this case raise are of course not new.  How much of the past should we protect and preserve, and on what basis do we make that choice?  What I think as grand, important design may not be to everyone’s taste and vice versa.  Modern needs may not be suitable for older buildings (especially when we financially penalise developers for repair/renovation not demolition and new build) and we do need modern functioning activities. But it can be done (as this small example in Edinburgh suggests, and as the reuse of Frasers and Jenners on Princes Street shows on a larger scale)

There is something more significant about these grand department stores on our high streets.  They are so much more than just a building in that they have become a statement about and of place.  We have noted this before (in Hull and in the Co-operative Architecture across the country) but the Marks and Spencer Oxford Street debate re-emphasises this.

That is why the recent pamphlet by Harriet Lloyd from SAVE Britain’s Heritage on “Departing Stores: emporia at risk” is such an important and interesting read. It documents the importance and the risks to department stores across the country, focusing on their architecture, importance to place and the discussion of what has happened to them, town by town. This is so timely and significant.  These stores are so much more than an old shop (to be bulldozed and forgotten) being signifiers and glue for a place.  Destroying them, or not protecting and valuing them, is place vandalism.  We lose more than a shop in these cases; we lose the sense of place.  They are not the only component of a place, obviously, but they are an integral part.  If we value our town centres we need to look up and see what we are doing.  Our architectural and design history in our streets is so much more than mere buildings.

The pamphlet can be downloaded here or is available in hard copy. In just under a hundred pages it details some of the risks and the opportunities. Most of the pamphlet is given over to individual case studies, store by store and town by town (see contents list above). These examples are surrounded by discussions of the issues, the origins and role of the department store and the opportunities their preservation and re-use provides. There are a large number of excellent illustrations and photographs which illustrate the architectural, design and place significance of these buildings.

Posted in Architecture, Buildings, City Centres, Department Stores, Design, Edinburgh, Heritage, High Streets, Historic Shops, Marks and Spencer, Oxford Street, Places, Town Centres, Urban History | Tagged , , , , , , , , , , , , , , , , , , , | 1 Comment

Town Centre Action Plan Launch and Roadshows

It was good to get back out and about and to be in Galashiels on the 31st May for the launch of the Town Centre Action Plan.  Last Autumn I wrote about the Great Tapestry of Scotland and its stunning (now award-winning) setting in the heart of Galashiels.  It was great to hear how successful it has been and its role as a catalyst for further enhancements to the town centre.

The main business of the day was the launch of the Town Centre Action Plan by the Minister Tom Arthur.  He was joined at the initial part of the launch by myself and by the Chief Executive of South of Scotland Enterprise Jane Morrison-Ross.  We were then followed by an expert local panel, all ably chaired by Professor Russell Griggs.

Minister Tom Arthur MSP launches the Town Centre Action Plan

The whole event was live streamed by Scotland’s Towns Partnership and is available to watch again on their YouTube channel. There is also a short summary on the STP website.

To be honest the main presentations, and especially my piece, went over well known ground.  I spoke about how we got to this point (in towns and policy), the framework and approach of the revised Town Centre Plan and the importance of collaboration at local levels to implement the actions and produce real change.  Much of what I said could be predicted from my report and earlier blog pieces, so I am not repeating it here.

What was notable however was the enthusiasm and commitment of the local voices, groups, organisations and council to ‘grasp the nettle’ and to make a real impact in local towns.  Galashiels was a good illustration of this, with local groups working with South of Scotland Enterprise and Scottish Borders Council.

Is there more that could be done?  Of course.  A discussion on the unfair balance of VAT on new build and refurbishment/renovation chimed with so many people (as it did later in the evening with politicians at the Scottish Grocers Federation Convenience Retailing Cross Party Parliamentary Group), is one example of something the UK Government could act on quickly.

The main theme that shone through however was that of local commitment making a difference within a clear framework (with more strengthening and support for town centres to come).  That local activity is the focus of the series of roadshows on the Town Centre Action Plan being organised by Scotland’s Towns Partnership.  Confirmed dates (a mixture of online and F2F – and it was great to be back in person speaking ‘live’ in Galashiels) thus far are below and in each case a showcase of local action will highlight what can be done and the opportunities.

North East Focus

7 June                 2 – 3.30pm        Online                 

East Focus (as part of Scotland’s Towns Partnership AGM/Tea Party)

8 June                 2.30 – 4pm        Online  

Highlands and Islands

24 August          10am – 12pm    Inverness + Livestream         (in person attendance by invitation only)

Central

31 August          10am – 12pm    Stirling + Livestream (in person attendance by invitation only)

South West

14 September    10am – 12pm    Ayrshire + Livestream (in person attendance by invitation only)

Posted in Government, Great Tapestry of Scotland, Local Authorities, Localisation, New Future for Scotland's Towns, Non-domestic rates, Place Based Investment Programme, Place Principle, Scotland, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Town Centre Action Plan, town centre first, Town Centre Review, Town Centres, Uncategorized | Tagged , , , , , , | Leave a comment

The Co-operative Group Results 2021

A few weeks ago I was asked to provide a short analysis on the Co-operative Group’s results for 2021. This has now been published in Coop News. I repost it below. If nothing else it shows the impact of the pandemic on retailing and the reverberations in performance vthat will still continue to be felt for some time.

“The period since early March 2020 has been a turbulent and traumatic one for everyone. Normal life has been disrupted through the onset and course of the pandemic and various legally enforced restrictions on movement and ways of behaving. Illness and death has affected so many families and communities. For organisations and businesses, and especially those dealing directly with the public, it has been a massive shock and disruption to normal activities and to pre-existing strategies.

Organisations have tried to keep going and have sought to adapt to the new and changing realities. In some cases, the trends and restrictions enhanced business models; in others trade completely disappeared. Even now, we are living in the aftershocks of the pandemic, with a high Covid-19 incidence in the population and consequent impacts on demand and supply and business operations, including distribution. “Living with Covid” is not as straightforward as some would make out.

The publication of the 2021 financial results for the Co-operative Group are thus of more than normal interest. Trading in turbulent times is not to be taken for granted. The pandemic affects the assessment of performance. What is the underlying operational and business performance and what are pandemic impacts, shocks or responses? Given the apparent endemic Covid-19 status, is our comparator the pre-pandemic “normal”, or do we accept that the world has been transformed and operations remain essentially short-term and reactive, so comparisons are less consistent?

To example the issues, the 2021 sales figure for the Co-operative Group is £11.2bn. This is a decline from 2020 when the figure was £11.5bn.  On the surface this is a disappointing level of trading. But 2020 was a very strong year for all locally focused and convenience stores as lockdowns, forced business closure in hospitality and other restrictions favoured the local store model. The last pre-pandemic year (2019) saw sales at £10.9bn which was itself up from £10.2bn in 2018 (due in part to the NISA acquisition). What is the appropriate benchmark year given all the implications of a continuing global pandemic? More critically perhaps what should our expectations be in this changed world? Should we be disappointed in not holding on to the sales gains of 2020 or should we accept it was never likely to be sustained as consumer behaviours in the UK returned “closer to normal”?

Table 1 (provided at end of the post) provides the numbers for the (self-identified) Key Performance Indicators (KPIs) for the Group. In this table the data is taken back to 2018 to allow for a short pre-pandemic trajectory as well as two years (differentially) impacted by Covid-19.

At the general level the data in the table, and especially the purely financial ones, show two issues.

First, on every measure the results show that 2020 was an exceptional year for the Group. Sales and profits boomed, and debt levels were reduced. The controversy over the decision not to return business rates relief needs to be seen in this light (in 2021 business rates relief was not taken and furlough relief was returned, showing how comparisons are difficult). What caution there is for 2020 comes in the non-financial figures, where active membership numbers fell, as did rewards spending (though the base rate reduced in October 2020).

Secondly though, there is the question of considering 2021 against this 2020 performance and/or the years before. Here the story is not as positive, with figures generally returning to at, or below, the 2019 and 2018 levels. Whilst as noted earlier, sales are greater in 2021, all profit measures are lower, and debt is now much higher. A 10% increase in Group sales over three years has not really resulted in any overall financial improvement. Non-financial measures continued to decline, as for example in active membership, rewards and colleague engagement.

Almost 69% of the Group’s sales are in the food sector, with a further c15% each in the wholesale and the federated components. Food remains the driver of the Group’s performance, though the dependence has fallen from almost 80% in 2017. The store estate is being remodelled (50 new stores in 2021, plus 87 stores renewed, 25 relocations and 15 extensions), but overall store numbers fell (by 29) and sales floorspace is at its lowest level in at least five years. There have been investments in branding and pricing, supply chain (a new depot) and colleague remuneration (Real Living Wage), whilst Covid-19 costs continued (c£30m) in 2021.  The supply chain though has struggled to deliver, especially in the latter half of 2021, possibly due to new systems (issues with that described as “inevitable”), but also to wider global pandemic related issues and the consequences of dealing with fluctuating production and demand. The amount of stock in the Group had been reducing (from 16.4 stock days in 2018 to 14.6 in 2020), but it increased in 2021 (to 16 stock days). The e-commerce food business saw tremendous growth (reaching £200m sales in 2021 from £4m in 2019) but from an exceptionally low base. Roll-out of store focused e-commerce, micro distribution hubs and the links with Deliveroo, Starship and (more controversially) Amazon and Amazon Prime, would seem to be sensible given the pandemic surge in the local and online channels. The strategy seems clear.

In presenting the 2021 results, the Chairman accepts that this has been a challenging year but claims the “continued planned strategic investments mean… (we) are well placed to ride out the storm and prosper beyond”. The incoming Chief Executive pointed to the long-term strategy, investment in the business and the values of the Co-operative Group as being the building blocks for the future.

However is the Co-operative Group with its focus on the local community and convenience market as well placed as it might be, or thinks it is? This was clearly working in 2020 as circumstances swung in the model’s favour. The beginnings of a return to previous patterns, as well as continuing disruptions, would have been expected to have had an impact, but it might have been hoped that a stronger 2021 operational performance should have been generated. The figures and comments point to some internal operating issues in addition to the impact of wider macro sector effects. Uncertainty hit cashflow and stockholding, adding to debt and losing sales.

The competition is not going to lessen in the sector, so it is critical that elements under the Group’s control are made as effective as possible. If 2021 was, in the words of the outgoing Chief Executive “an important and defining year”, then it is hard not to see 2022 as being even more so. Yet, of all the years, 2022 is not likely to be a stable one. The pandemic has not gone away nationally or globally. The full implications on supply chains of Brexit remain to be felt, though they are becoming increasingly apparent. The war in Ukraine has impacted peoples’ lives there, and caused a range of human and business impacts there and elsewhere, the full dimensions of which remain unclear.  Together these are producing massive concerns over high energy prices, disrupted supply and cost pressures leading to increased inflation, exacerbated by UK government induced lowering of disposable incomes for many consumers. Individuals, communities and businesses are being pressured through the impact of rising costs and altered demand. The business need to be agile, resilient and flexible in the eye of these various challenges is heightened, but in an environment the like of which most have not experienced either as individuals or business managers.

It is not clear how people will react to these pressures, problems and difficult times. One would hope that values and strengths of communities and locales would come further to the fore, as they did in the initial stages of the pandemic. In this regard the Co-operative Group is more than a food retailer of course, and such values and behaviours help people and the planet. The financial performance is obviously important to allow this investment in operations and activities within this wider context (Co-operating for a Fairer World). More than ever the balance between these aspects of the Co-operative Group, as exemplified in the Chief Executive’s reflections on 2021, needs to be borne in mind. In the final analysis though, if business operations do not produce enhanced results, then difficult times and decisions lie ahead.”


Table 1: Key Performance Indicators for the Co-operative Group

 2021202020192018
Underlying Pre-tax Profit (£m)£-32m£100m£35m£33m
Underlying Operating Profit (£m)£100m£235m£173m£97m
Debt (incl leases) (£bn)£2.4bn£1.97bn£2.16bn£0.8bn
Debt (excl leases) (£m)£920m£550m£695m£764m
Revenue (£bn)£11.15bn£11.47bn£10.86bn£10.16bn
Operating Profit (£m)£64m£207m£173m£90m
Profit before Tax (£m)£57m£127m£24m£83m
    
Active Members (mn)4.2m4.3m4.6m4.6m
Community Reward (£m)£19m£13m£11m£12m
Member Reward(£m)£21m£45m£57m£60m
Members Sales in Food (%age of total)29%30%33%33%
Colleague Engagement (%age)72%76%76%76%
Posted in Availability, Community, Cooperative Group, Cooperatives, Covid19, Food Retailing, Membership, Retailing, Supply Chains | Tagged , , , , , , , | 2 Comments

Why is Historical Research Important in Marketing?

A couple of years ago I was invited by a good friend of mine to contribute to an inaugural special issue of a journal. Professor Kazuo Usui (Saitama Gakuen University), a frequent visitor to Stirling and Edinburgh (where he is an Honorary Professor) was putting together a special issue for a new journal – the Japan Marketing History Review, supported by the Marketing History Society of Japan.

It was one of those invitations; you feel honoured but not a little apprehensive given the topic (Why is historical research important in marketing?) and also the calibre of those being approached. Then the pandemic hit, deadlines slipped, other things took over and visits between Japan and Scotland were halted. Eventually though the project got back on track and I (we) put together an article which we were very pleased to have accepted.

In April 2022 the issue has finally been published and as this is an open-access journal, all the papers are available to download. Our paper – more on this later – can be downloaded from this blog, as can the full list of the issue contents from here.

The contents list makes for interesting reading with the issue having brought together some serious scholars of marketing and retailing history (whereas I dabble in it). It is a privilege to be in the same collection as Kotler, Keep, Fuat Firat, Witkowski and Belk amongst others from the USA, as well as leading Japanese and European scholars on a range of historical topics in marketing and retailing. As can be seen from the contents there are four specifically retail papers which caught my eye, and I am looking forward to reading.

Our paper (Maria Rybaczewska and myself) entitled “Twenty-one years of going shopping” considers the difficulty of placing the consumer voice in the business, corporate, marketing and retailing history space. The paper takes a serendipitous donation of a long-run (1977-1999) series of shopping diaries, reporting one individual’s every shopping trip and retail purchase over this period. This is an unique (as far as we know but happy to be correcgted and to accept further such donations to the University) but authentic data record of “everyday shopping” in a period in the UK marked by rapid retail (and social) change. We have much more to do to analyse the diaries, but this paper hints at the gaps in our knowledge, the potential, and the difficulties. You can make up your own minds about the value of such a source and future analyses.

More importantly though the other papers collectively make a fine edition and address in novel and interesting ways the question posed in the title of this post. Historical research is interesting, fascinating and informative for marketing and for retailing, as these authors and papers demonstrate.

If you are at all interested in this broad area, you should check out the website hosting the papers in the special issue.

Posted in Academics, Consumer Change, Consumers, Data, Diaries, Food Retailing, History, Retail Change, Retail History, Retailers, Shopping | Tagged , , , , , , , , | Leave a comment

The Small Business Bonus Scheme

One of the recommendations of the 2017 Barclay Review of the Non-Domestic Rates System in Scotland was that an evaluation of the Small Business Bonus Scheme (SBBS) be undertaken. Five years on, it has finally arrived, all 232 pages of it. The Fraser of Allander Institute has laboured mightily – and lengthily – to produce its evaluation. And whilst not being unkind, after all that the answer is that we don’t know what, if any, effect the SBBS has. It is not that there is no effect, we do not know if there is one.

Review of the Small Business Bonus Scheme – available for download here

Now this is not the Fraser of Allander Institute’s fault. In glorious detail the authors take us through both the data difficulties in addressing their core – and on the surface simple, – questions and the extreme and frequent ways their research was delayed, particularly by the Covid19 pandemic and the lockdowns and work disruption caused. One can only imagine and sympathise with their frustrations, which come dripping off the pages.

The evaluation set out to find out who is getting the relief, its impacts and wider benefits and costs and if the current scheme could be improved. This matters, because non-domestic rates generally are a hot topic of contested debate (not least by me, though the 2020 Parliamentary “spat” showed people were interested, including in the SBBS), the SBBS is seen as something of a flagship scheme for small business and that in 2020 £279m was spent through the SBBS on qualifying businesses.

The six key findings of the Review are:

  1. Coverage of the SBBS in broad and usage has increased over time
  2. There is no evidence of enhanced outcomes from SBBS, but businesses perceive there to be benefits
  3. Businesses with similar rateable values vary substantially in size and other attributes
  4. The eligibility thresholds in SBBS are reflected in “bundling” in the Valuation Roll
  5. Data challenges preclude drawing robust conclusions
  6. Suggestions for data collection improvement to facilitate future evaluation are provided.

There are five recommendations which I won’t repeat here. Fundamentally the say don’t start from this position, we need a business not a property register, undertake appropriate, preferably legally enforced data collection on a regular basis and look out for any “game-playing” (my interpretation).

Now this all goes to reinforce a number of my prejudices. My concern about data is long-standing and the suggestions here, especially if geo-location is part of the data and the register being at least partially public, would be a huge step forward.

Secondly, this would also encourage a focus on the aims of this policy and a possible revision. Could we see a revision of SBBS made simpler for users and based on geography, size, sector and organisation type to help meet our wider national ambitions? After all the Barclay Review of five years ago did suggest a closer look at the Northern Ireland system (mentioned again in this Review) which provides a tighter focus.

Finally, hopefully it is another nail in the apparent untouchability status of the current approach to NDR – they really are unfit for so many reasons and purposes. We have to ask the questions Barclay was not set up to do and really question the relevance, balance and appropriateness of NDR’s as part of the fiscal mix and levers. Supporting particular types, sizes and locations of organisations would be so much more effective if we did this. Though to be fair to Barclay it did raise the the potential of introducing primary legislation enabling councils to use NDR to tackle out of town development and online development – this of course has not been taken up. With the recent publication of the Scottish Government and COSLA response to the Town Centre Action Plan Review which commits to looking at NDR and whether it is aligned with government policies, most notably in terms of the climate emergency, perhaps things are changing. As I have noted before for every encouragement (revised and targetted SBBS) there should be an equal discouragement (revised and targetted NDR system).

Posted in Barclay Review, Government, Internet, Large Store Levy, Legislation, Local Authorities, Non-domestic rates, Online Retailing, Out of Town, Public Policy, Rates, Scotland's Town and High Streets, Scottish Government, Small Business Bonus Scheme, Small Shops, Tax, Town Centres | Tagged , , , , , , , , , , | Leave a comment

Town Centre Action Plan 2

This is a rather longer post than I had intended, but given I worked pretty hard for 8 months on the Report to which the Response has just been published, I hope you will indulge me.

In 2020 I was asked by the then Cabinet Secretary to chair a Review into the Town Centre Action Plan. The Review Group undertook its task through a variety of methods and approaches. The resultant report “A New Future for Scotland’s Town Centres” was published in February 2021. If you have not seen it then it is available here, and my three-post blog on aspects of our recommendations can be accessed here.

The initial combined reaction of the Scottish Government and COSLA was to welcome the report and its recommendations, stating

We strongly support its overarching aim to work with our communities to transform the future of our town centres, help us recover and learn from the impact of the pandemic and realise the necessary economic, environmental and social wellbeing benefits. We support the vision the review has developed and are determined to work collaboratively using this report to help us to achieve that vision”.

They indicated that due to the Parliamentary elections in May 2021 a formal response would be the responsibility of the next Government and come in due course.

In the meantime, I delivered numerous presentations on the Review and its recommendations, albeit remotely. Scotland’s Towns Partnership and a variety of partners held (and continue to hold) various meetings and seminars on specific aspects of the report and its areas for recommendations and delved into more detail as to how some of these could be delivered. The Review Group met with the new Minister on a couple of occasions to brief him on their thinking. In November 2021, the draft National Planning Framework 4 was published and contained references to our Report and some of the approaches we had advocated (see my thoughts on NPF4).

The intention had been that the Scottish Government and COSLA would produce its formal response by the end of 2021. As with so many other things, the speed and virulence of the Omicron variant set the timetable back. The National Strategy for Economic Transformation was delayed, as consequently were other important documents, such as the Retail Strategy for Scotland. My comments on the latter and on the City Centre Recovery Task Force Report are available in this blog (Retail strategy; City centres). In the meantime interest in town centres in Scotland has been maintained at a high level, not least through various Parliamentary committees, to which I have presented. Throughout this there has been a broad welcome for the thrust of the “New Vision”, though it is recognised that some of the detailed recommendations are challenging.

Scottish Government/COSLA Response to Town Centre Review – Available for download here

The formal Scottish Government/COSLA response to “A New Future for Scotland’s Town Centres” has now just been published, and is available here. The 21 page document contains forewords by the Minister and by COSLA, a brief background/context and then the components of the Town Centre Action Plan 2022. The Response formally adopts the Review Group’s vision for towns and town centres and places this “Town Centre Action Plan 2” as a Call to Action for all and not purely a government centric approach, reflecting the uniqueness of our towns across Scotland. Governments though at all levels do have a role to play as enablers and funders as well as providing the frameworks and alignments.

TCAP2 now comprises four categories making up the Call to Action:

  1. Putting the right policy framework in place
  2. Ensuring the right kind of support
  3. Providing a framework for investment, and
  4. Working closely with partners.

In each of these categories, a structure has been adopted that aligns with appropriate outcomes that the Review Group identified as being needed: planning, town centre first, taxation and fiscal levers, town centre living, digital towns, enterprising communities and vibrant local economies, climate action, measuring and evaluating progress and demonstrator towns.

It would be invidious to select specific suggestions at this juncture; TCAP 2 needs to be considered in the round and in the light of the other major documents with which it aligns, as for example in NPF4 in planning, and in the actions already underway through the Place Based Investment Programme and other initiatives (Scotland Loves Local, Community Wealth Building, Just Transition, Climate Action, 20-minute Neighbourhoods).  Taken together these lay out a coherent approach to town centres and begin the process of reversing the harms to town centres from disaggregated, decentralised development.

As Chair of the Review Group, it is a reasonable question as to whether this response meets what would have been my ambitions. Three areas of recommendations were identified in “A New Future”; strengthen planning, sort out the fiscal and taxation levers and focus on specific “demonstrator” aspects of town centres. Progress since “A New Future” on the first and third of these has been strong, and TCAP2 reinforces and extends that commitment and actions . The Response to the second recommendation area is, understandably, more mixed. There are good statements on trying to sort out online taxation and VAT on refurbishing buildings. There is less on the suggested more challenging aspects of taxation on out of town developments, car usage and non domestic rates. But no Review gets everything it wanted, and certainly not in the immediate timescale. We have spent 50 or more years damaging or town centres; it does take time to recognise how to put a genie back in a bottle.

There is thus, in my view, much to applaud in this Response, not least the action-oriented style of writing and the detail and specifics. Investment has been made and one hopes that more will be forthcoming. As the context setting piece notes though:

“Words on a page, or bullet points in a plan set the scene; they do not deliver the outcomes we need on the ground. This is not one person’s, one public body or one organisation’s responsibility; it is a shared endeavour and requires individuals in whatever role they have to take positive action. It also requires all of us to reflect on and avoid actions and decisions which continue to damage and harm our town centres. This Call for Action sets out some of the ways in which we can all seek to do our part, locally and nationally, in re-building, re-energising and re-imagining our towns to meet our place and country ambitions.”

The Scenario at the end of the Response lays out where the hope is these actions will take us:

“What are these actions designed to achieve?

Towns that develop in a sustainable way, that enable communities to influence that development, and build on the empowerment approaches across Scotland. Communities of identity and interest, particularly those experiencing inequalities, empowered to identify their own needs and opportunities, and supported to participate in planning their own futures.

Place based approaches to town centres embedded across policy areas so that support, funding and decision making is better co-ordinated and aligned to deliver the collaboratively agreed vision unique to that town centre. With demonstrators testing and showcasing what is possible to inspire other town centres to adapt the learning to their local context and setting.

More opportunities for living well locally in our town centres, where the design, development and management of our towns support people to meet most of their daily needs locally within a 20-minute neighbourhood helping us address climate change, meet our net zero ambitions, encourage healthier active travel options and reduce the need to travel unsustainably.

The development of local wellbeing economies with town centres at their heart, which put people, place and planet first and foremost; enabling and empowering communities to tackle poverty and inequality on their own terms. Where more town centre assets are owned, managed and used locally, creating opportunities for local entrepreneurs, capacity and skills building – with equity of access to digital. Where local decision making is based on a deep understanding of local assets, resources and challenges to enable local partners to focus on the issues that matter to them in the places they live, work, play and spend time in.”

The proof of course will be on the ground in towns across Scotland, but it does feel like the good work stemming from the Fraser Review through the first Town Centre Action Plan and subsequent actions, is being built on and extended. We now need to be more ambitious for our town centres and seek to live up to the vision stated by the Review Group:

“Towns and town centres are for the wellbeing of people, planet and the economy. Towns are for everyone and everyone has a role to play in making their own town and town centres successful.”

This Response helps in that regard.

Posted in Car Use Reduction, Climate Emergency, Government, High Streets, Local Authorities, New Future for Scotland's Towns, NPF4, Place Based Investment Programme, Place Principle, Planning, Public Policy, Scotland Loves Local, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Town Centre Action Plan, Town Centre Action Plan Review Group, town centre first, Town Centre Living, Town Centre Review, Town Centres, Towns, Understanding Scottish Places | Tagged , , , , , , , , , , , , , , , , , , | 3 Comments

At the Heart of Economic Transformation? The City Centre Recovery Task Force Report

There can be little doubt that the pandemic has affected city centres to a far greater extent than many places. City centre businesses and organisations depend on residents, visitors, tourists and workers for their footfall and trade. When lockdowns occurred, working from home become a way of life for some and tourists and visitors were banned, city centres lost much of their vibrancy and life. In Scotland this was especially felt in Edinburgh and Glasgow.

Source: Centre for Cities High Street Recovery Tracker

The City Centre Recovery Task Force Report (published 31st March) was a joint endeavour between the Scottish Government and the Scottish Cities Alliance, representing the seven official cities of Scotland. The aim of the Task Force was to answer a “principal question”:

How can the public, private and third sector work together to ensure that Scotland’s city centres have a prosperous future, contributing to inclusive and sustainable growth in our cities and their wider regions

The answers to this question are outlined in the Report from the Task Force, produced recently and available here.

Availble here

The report, as might be expected makes the case for the primacy of the cities of Scotland and their importance in the economic life of the country. This is especially the case in the chapter on the context for the seven cities (though really only three get mentioned often (the big two plus Aberdeen) and a fourth in a specific circumstance (Dundee and culture)). The bulk of the report though is given over to a chapter on Priorities and one on Putting Recommendations into Practice.

Seven priorities are outlined:

  1. Action on immediate recovery (mainly funding issues)
  2. Data on spend
  3. Building expertise
  4. Visitor campaign
  5. Investor attraction
  6. Greater clarity around return to offices
  7. Call on UK Government to make changes to VAT to better support city centre recovery.

These are then followed by 7 outcomes for city centre recovery over a five year period, achieved by putting recommendations into practice. The outcomes are:

  1. Increased residential capacity and occupancy in city centres
  2. Smaller city centre carbon footprint
  3. Reduction in the amount of vacant and derelict land and property
  4. Increase in city centre creative, entrepreneurial and start-up activity
  5. More revenue raising opportunities for local authorities
  6. Reduction in oversupply of retail, and increase in cultural offer
  7. Faster and more agile planning decisions.

Each outcome, bar one, has a number of recommendations or actions.

A few observations struck me on reading the Report.

First, there is an interesting (but far from new) point about the difficulty of obtaining data to illustrate the Report and to reach conclusions. The Report comments on the lack of consistent data for city centres (and cities) and the over reliance it forces onto data at the Local Authority level. Representing Stirling city centre by data on Stirling Council shows how ludicrous this situation is. There is urgent need to establish a consistent, reliable and comparative data source on city centres, and also for towns (though see the start made in Understanding Scottish Places). Agreed boundaries and measures would help enormously and is something statisticians in Scottish Government should be doing. We are all badly served in this regard.

Secondly, there is little in the seven recommendations into practice headlines that one could disagree with. These in many ways align with the Place Principle and the towns review and recommendations and are clearly issues we need to address at all urban levels. The devil is in the detail of course and here on reading the detailed components under each area, one is left asking why these things are not happening already? More worryingly though the approach does not seem to recognise the wider issues in the situation we start from: we need to tackle the harm that is being done to city (and town) centres by existing developments and approaches and recognition of this seems to be lacking.

Most clearly this is seen in the issues around productivity, a just transition and a plea made in the urgent priorities to get people back into offices. The latter is not a claim unique to this Report of course. However, it flies in the face of the behaviours that people have got accustomed to and the benefits they, and some businesses, derive from this, and the complex relationship of transport commuting, just transition and sustainability and productivity. There is, for me, a little too much of wishing to return to what was there before, as though that will be the right approach for our (needs to be) much changed future. Agile working, working from home, productivity and sustainability gains as well as mental health and wellbeing need stronger consideration in the city centre agenda. This is a challenge for city centres and their businesses. It implies the need for much greater recognition of the shared agenda and relationships of city centres and their various linked places including towns.

Finally, and this is very much a personal, but probably unpopular view, the Report in trying to encompass all seven cities does not sufficiently recognise that Scotland has two major cities in Glasgow and Edinburgh and two more specialist cities in Aberdeen and Dundee (which in other countries might be called large urban places or towns). There are special requirements for these two major cities and they have less in common with the other cities; those other cities have more in common with the large towns agenda. More focus on the very real issues of the city centres of Edinburgh and Glasgow – and the potential opportunities to rethink them – might have produced a more dynamic and actionable report for these essential components of Scottish economy and society.

Posted in Aberdeen, Cities, City Centres, Consumer Change, Dundee, Edinburgh, Employment practices, Footfall, Glasgow, Local Authorities, Lockdown, Pandemic, Place Principle, Retailing, Scotland, Scotland's Town and High Streets, Scottish Government, Sustainability, Sustainable Development, Town Centres, Towns, Understanding Scottish Places, Urban | Tagged , , , , , , , , , , , | 2 Comments

The Retail Strategy for Scotland – Launch Day Questions to the Minister

As noted in my previous post, on the 24th March the Scottish Government published its Retail Strategy for Scotland and the Minister Tom Arthur MSP launched it in Parliament that afternoon.  The Strategy can be downloaded here and the Ministerial Statement here.

Ministerial Statement available on YouTube

Following the statement, MSPs had the opportunity to question the Minister.  There was time for 13 questions on a range of retail issues and from across the country.  Whilst not exhaustive, I have grouped the questions into topic areas:

  1. Productivity of retailing
  2. Business rates and costs for business (and consumers)
  3. The importance of small retailers and the wellbeing economy
  4. Business Improvement Districts (BIDS)
  5. Membership of the Retail Industry Leadership Group and its likely approach

The sense I took from the questions was of a broad welcome for the strategy and its focus on the retail sector (and those it employs and serves), but a keen-ness to see action and implementation on big issues.  (Not dissimilar to my session for the Economy and Fair Work Committee).

I thought I might reflect for a moment on these five areas:

  1. Productivity: the question of retail productivity is a complex one.  Most measures used are labour productivity based and retail does badly on this, with a “long tail” of “inefficiency”.  For me this is a problematic conception.  Its logical conclusion is that retail should solely be based on a greenfield site, big box, highly automated shed.  This is not retailing as most of us want it, most of the time.  If we are serious about Wellbeing Economy and Community Wealth Building, then how should we assess and value retailing activities including its productivity? We have to get beyond simplistic purely business focused measures.
  2. Business rates and costs: my views on business rates/non domestic rates are well known (see Town and Country Planning Association article here and other commentary here, as well as in A New Future for Sctotland’s Town Centres).  I believe firmly we need reform/abolition and we need to address a fundamental issue – how do the levers in our taxation and fiscal system support and enable us to meet our National Outcomes and our ambitions in the National Performance Framework?  Currently they work against our policies and are doing harm to our town centres (and other national policy ambitions).
  3. Small retailers: the strategy is meant to be read in alignment with other major recent policy announcements.  This would indicate a support for a more varied, diverse and non-chain focused retail sector.  The question is whether our actions are fully behind this ambition and if not how do we move support to be more targeted to support small retailers.
  4. BIDS: a question was raised over why some BIDS work and some don’t.  But BIDS are a democratic process, and it is like asking why one political party succeeds in one place but fails in another.  BIDS can – and do – work well when attuned at the right scale to both needs and wants.  But the context may not always be there.  This is a strength of the approach in my opinion. There is perhaps need to recognise that more support for BIDS professional management on the ground is needed.
  5. Retail Industry Leadership Group: we understand the Minister will co-chair this with a leading retailer.  Beyond that the membership and its approach remain to be developed.  But the timescale is ambitious and the initial tasks – a Just Transition Plan and a Skills Audit and Action Plan – have been set down.  The implementation and action are of course the keys to the success of the strategy.  That MSPs were so interested in the Group, its membership, remit, mode of operation etc is testimony to the interest in, and recognition of, the place of retail.

Those were my reflections on the Ministerial Statement, but if you want to make your own mind up, then the session is available here.

Posted in BIDS, Bids Scotland, Consumer Change, High Streets, Independents, Local Authorities, Local Retailers, New Future for Scotland's Towns, Places, Public Policy, Retail Change, Retail leadership, Retail Policy, Retail Productivity, Retail Strategy, Retailers, Scotland, Scotland's Improvement Districts, Scotland's Town and High Streets, Scottish Government, Scottish Retailing, Small Shops, Strategy, Town Centres, Towns | Tagged , , , , , , , , , , , , | 1 Comment

A Retail Strategy for Scotland

On the 24th March, the Scottish Government unveiled its long-awaited Retail Strategy for Scotland. The Strategy can be found here and the Ministerial statement from Tom Arthur MSP can be found here.

Getting the Right Change: A Retail Strategy for Scotland outlines how the Scottish Government, business leaders and trade unions can work together to unlock opportunities to grow businesses and the economy, improve wellbeing and address inequality, and support progress towards our ambitious climate change targets.

Actions outlined include:

  • developing and promoting a Fair Work Agreement that retailers can voluntarily sign up to, to improve fair work conditions across the sector and contribute to reduction of in-work poverty
  • working with Skills Development Scotland and other partners on a Skills Audit and Action Plan, to support retail reskilling or upskilling as jobs change, for example due to technology like self-scan checkouts and online ordering systems
  • developing a Just Transition Plan for Retail to protect jobs and contribute to net zero emissions by 2045 through developing local supply chains, reuse of materials and sustainable travel choices by staff and customers
  • promoting town and city centres and local businesses while supporting ways to repurpose vacant retail units
  • harnessing opportunities in the National Strategy for Economic Transformation that will directly support the retail sector, like actions to grow businesses, boost productivity and support entrepreneurship

A new Industry Leadership Group will be established to drive delivery of the retail strategy, co-chaired by Public Finance Minister Tom Arthur.

I should disclose at this point that I was a member of the Ministerial group that advised on the development of the strategy and that during its development I took a lead in discussions about the Place section (especially given my work on A New Future for Scotland’s Towns). As with all such endeavours there are issues that I argued strongly for inclusion in the final strategy and some that failed to be accepted by the wider group and did not make it into the final document in the form I would perhaps have suggested. This is the nature of such things. Overall though there is much to be positive about in the strategy.

When I started out as an academic in retailing over 40 years ago, one of the things that was commonly noted was that retailing was seen as a “Cinderella” sector. Its very ubiquity, in that most people shop, suggested that it was somehow a simple business and not worthy of academic study (nor of much government attention). It has taken a while but the fact that the Scottish Government has developed its thinking on retailing and this Retail Strategy is a very welcome and important step forward. Retailing is a large, diverse and highly important sector in terms of economic and social activity, the businesses, organisations and jobs its contains and represents and the opportunities it provides for individuals, entrepreneurs and various minority groups. This recognition is long overdue.

The Retail Strategy itself comprises four sections – Sector, People, Place and Just Transition. The vision it sets out is for a successful, resilient, sustainable and profitable sector. The focus of the strategy is on the establishment of an Industry Leadership Group which will have responsibility for rapidly undertaking a skills audit and action plan, based around the needs of the changing sector and a focus on implementing a Fair Work Agreement, and on the development of a Just Transition Plan for retailing as the sector comes to terms with the climate emergency.

Vision, Prioity Areas, Aims and Delivery of the Retail Strategy

These initial elements will see the Retail Strategy take into account recent other reports from Scottish Government to develop a linked and aligned approach. There will need therefore to be a focus on the National Strategy for Economic Transformation, the outcome of the National Planning Framework consultation, the Covid Recovery plan and Government priorities and approaches to a Wellbeing economy and to Community Wealth Building. If these are taken seriously by the Industry Leadership Group, then this will lead to a reimagined and redesigned retail sector. This will not necessarily be a rapid change, but it will clearly signal priorities for the retail sector and its location and operation.

Within the Place strand the focus is on developments already in train, including the Place Based Investment Programme, NPF4 (encompassing many of the planning issues in A New Future for Scotland’s Town Centres), 20 minute neighbourhoods, the Go Local campaign for local sourcing, the development of Business and Community Improvement Districts and the forthcoming Scottish Government/COSLA formal response to A New Future for Scotland’s Town Centres aka Town Centre Action Plan 2. As the Strategy makes clear there is a clear role for retailing in strengthening communities and town centres (in both physical and digital terms), but this may well require new thinking from many of the retail organisations.

Overall, the Strategy aims to align the retail sector with the National Priorities Framework and Outcomes in perhaps a much closer fashion than has been seen before. As ever though, a strategy is only the starting point and it is the implementation to an aggressive timescale that will provide the evidence of the real position of retailing at the heart of the economy and society. Hopefully we can look forward to a bold approach.

Aligning the Retail Strategy with National Outcomes

In the next post I will reflect on some of the questions the Minister fielded when he made his statement to Parliament and my thoughts on what some of the questions and the issues they raise tell us.

Posted in 20 Minute Neighbourhood, Bids Scotland, Community, Consumer Change, Employment, Government, Internet shopping, Just Transition, Local Retailers, New Future for Scotland's Towns, NPF4, Places, Public Policy, Retail Policy, Retail Strategy, Retailers, Scotland Loves Local, Scotland's Improvement Districts, Scotland's Town and High Streets, Scotland's Towns Partnership, Scottish Government, Scottish Grocers Federation, Scottish Retailing, Shopping, Town Centre Action Plan, Town Centres | Tagged , , , , , , , , , , , , , , , | 3 Comments