Rarely a week will pass without the tumultuous challenges facing the retail industry being brought to the fore in the media, whether that be plummeting footfall, a squeeze on retail sales or the inevitable shop closures.
It is clear that this period of industry flux is here to stay in 2020.
These are unsettling times for retailers, with conditions the toughest in a decade.
Demand is weak and shopping habits are shifting. Retail sales growth has flatlined over the past three years, with 2019 the worst year for a quarter of a century and the first year to show an overall decline in sales growth.
The only fixed point in this world of flux seems to be rising costs, which divert cash away from growing the business, and which are increasingly difficult to absorb without passing on to shoppers.
Household finances continue to be under strain, and we welcome the current Welsh Government administration ruling out ruling out increases in income tax rates during this Assembly term.
Continuing to protect those on modest and low incomes is the right approach, especially with further increases in council tax expected.
And whilst the industry is adept at innovating and adapting to the challenges it faces there comes a time when we need to shine a spotlight on the barriers to investment, and how these need urgent action, to ensure we see reinvention retail not retail armageddon.
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The recent challenges facing the aviation industry, and the 海角视频 Government’s response of holding an inquiry into Air Passenger Duty, demonstrates the glaring gap in sector attention and how decision makers continue to overlook the issues that retail faces.
It’s time our ‘Cinderella’ sector, which employs more than 130,000 people in Wales and is the na-tion’s largest private sector employer, receives the overdue attention it deserves.
Getting a grip on government-imposed costs is essential and topping the ‘to do’ list is the business rates burden.
It’s a well-worn narrative, but there can be no denying that the rates headache is hugely onerous for the industry, with the multiplier now at a 20-year high and standing higher than the figure in England and Scotland.
This is an acute issue for retail, which accounts for 25% of all rates.
The uplift pencilled in for April is six times faster than that of the growth in retail sales and will add £7 million to Welsh retailers’ bills.
How to solve the business rates conundrum is clearly no easy task, and it is an issue that Governments and task forces have been grappling with for many years.
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But there are measures that we are seeking which will lead to greater investment by the sector, and fundamentally will lead to more prosperous and vibrant local economies.
A freeze in the rates multiplier would be a positive first step towards a timetabled plan for reducing the rates burden. As an immediate measure to bolster confidence we seek more frequent rate revaluations, something ten of the nation’s leading business organisations called for last autumn in a joint letter to the Finance Minister.
Scotland’s Parliament has just voted for 3-yearly revaluations, and Wales risks being left behind.
The Welsh Government does provide support to small business in terms of the reliefs and exemptions that are available, and this is welcome.
But it is a sticking plaster approach to a punitive and archaic system which deters investment.
One cannot ignore the role medium-sized and larger retailers play in the Welsh economy, whether as major employers or the role they play in terms of community investment.
Indeed, only last month the WRC published new research showing retailers in Wales raised £10 million for good causes last year.
Our members provide routes to market for indigenous producers, and many Welsh retail brands are market leaders.
They work hard to keep down prices for households and millions across the nation benefit from a quality retail experience every day.
And so to ignore the pressures that retailers face, due to spiralling costs, would be at the peril of those that are tasked with encouraging economic growth.
In December 2018 the industry gave a cautious thumbs-up to the Welsh Government with the launch of its Economic Action Plan.
For the first time we saw retail ‘prioritised’ and given acknowledgement for the role that it plays.
We continue to press for an industry enabling plan, one which could address not only the business rates burden but the wider costs and challenges that have escalated over recent years.
Government and the industry have a shared interest in retail’s future success.
Retail in Wales has a fantastic story to tell and can offer so much to help Government in addressing some of the public policy challenges it faces, but it needs a more strategic and co-ordinated approach to enable this to happen.
Despite the doom and gloom narrative that too often frames our industry, WRC still look for opportunities to convey the dynamic role of the sector, it’s reinvention in new business models and the levels of investment in technology, skills and logistics capabilities – all of which have significant positive consequences for Wales.
With retail under enormous pressure, this is an opportunity for Ministers and decision makers to take tangible steps to help retailers as they reinvent themselves for the future with confidence.
We need a collegiate approach to doing so, and the Welsh Retail Consortium and our members are keeping the doors wide open for further discussions.