Any Given Sunday?

Well, the first Conservative UK budget for 18 years has been and gone, and no doubt retailers are beginning to assess what it all means for them. That might be tough given the lack of some details, some rabbits that may or may not disappear into hats again, the varying time horizons and the very different impact on differentially affluent (or not) sections of the social and consumer base.

The main change trailed in the now traditional pre-budget leaking of some of (but never all) the juicy snippets, was completely irrelevant to Scotland. Large shops in England may – or may not depending on your local authority or mayor – now be able to open for more than 6 hours on a Sunday.

This all brought back memories for me, given the work we had done in the early 1990s on the likely effects of Sunday trading. We seem to be destined to re-live those debates, in that many of the comments were terribly familiar and predictable.

However a few things have changed. We have a long experience in Scotland of the hours and places that retailers find works for them on a Sunday. We also have a very changed society – the internet was a glimmer 25 years ago, but so too were the myriad other things now available as standard to do on Sundays.

The biggest difficulty for me (and for retailers) may be the potential patchwork of permissions that could exist in England at a local level. But then one suspects that there will be equalisation over time for political and commercial reasons. The initial periods could be messy though and, as we have pointed out before, variability vies for uncertainty as retailers’ pet hate. Whether retailers can make this work financially remains to be seen however. And might Mondays come more under question as a consequence in some places?

The large rabbit in the budget hat was the National Living Wage or as it rapidly became clear the Enhanced Minimum Wage for those over 25. The hike in this will affect all retailers, including those in Scotland, and the impacts of this are being thought through. It does look like retailers will be amongst those most affected, but quite how remains more than unclear.

Retailers employ a lot of people and many of them are on or close to the minimum wage. Many seem to be recipients of further government support despite working. This does not seem right, but this proposal does not seem to solve that to the benefit of staff. The increased costs of employing people will make retailers question staffing levels and hours of work – and make extended hours less profitable perhaps – in order to maintain appropriate returns. But at least the playing fields are level in one way, though smaller stores have less room to manoeuvre.

And then there’s the age thing. People under 25 – not unknown in retailing – will be comparatively cheaper and there may thus be further incentive to look at how the labour force is structured. This is rather easy in retail where part-time working is so common and youth employment is prevalent.

The UK government may make much of these changes, using the budget narrative of renewal and their sense of recovery, thus generating improved consumer confidence and then consumer spending. However this does look to be hugely different depending on the part of the country involved and is unlikely to be of such a magnitude to improve the lot across the retail sector as a whole. Add in limited pay increases for many workers – if not cuts for them and others when benefits and full impacts pf other measures are taken into account – and the likely rise in many costs, then even that hope may be forlorn. Retailers can not bank on a consumer spending spree digging them out of a cost hole.

For retailers then, the budget offers up a worrying sense of uncertainty at many levels and does little to address their pre-budget concerns. The sideshow of corporation tax reductions for some also masks the continuing rise in business rates and the problems this is causing and exacerbating. Perhaps Scotland can now take a lead here and sort out the rates mess? After all, with Sunday trading and fox hunting, copying Scotland seems to be in vogue.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Education and Students and a Fellow of the Royal Society of Edinburgh
This entry was posted in Association of Convenience Stores, Consumers, Government, Independents, Legislation, Localisation, Part-time working, Planning, Profits, Rates, Regulation, Retail Policy, Retailers, Scottish Government, Sunday Trading, Wages and tagged , , , , , , , . Bookmark the permalink.

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