In its Budget submission – Weathering the storm: tackling the costs crisis – sent to the Scottish Government’s Deputy First Minister and interim finance secretary, John Swinney MSP, the SRC says retailers are working hard to keep down the cost of living for customers whilst themselves battling rising outlays in the face of weak demand.

Retail is Scotland’s largest private sector employer providing 233,000 jobs. However, recent data shows retail sales have flatlined in real terms, shopper footfall is faltering and is still below pre-pandemic levels, whilst store vacancies remain elevated.

The 12-page submission from the leading sectoral trade body comes ahead of the expected publication of the conclusions of the devolved administration’s emergency budget review and the unveiling later this autumn of its tax and spending plans for 2023-24.

The SRC says it matters profoundly that Ministers succeed in their plans – outlined in the Scottish Spending Review – to reduce the cost of doing government, otherwise taxes might rise and the economy be held back.

Specifically, the SRC is suggesting government should protect less affluent workers by ruling out increases in Scottish income tax rates, consider introducing a Scotland-wide shopper stimulus along the lines of Glasgow’s voucher initiative, and rule out any increase in the business rate next Spring which is already at a 23-year high.

The consortium has also suggested that the Scottish Government speed up restoration of the level playing field with England on the higher property business rate, shelve workplace parking levies for the next 18 months and curb the volume of devolved regulation being implemented or considered.

David Lonsdale, director of the SRC, said: “Once again retail is in the eye of the storm, having just come through two incredibly difficult years of the pandemic. Shops are facing into significant cost spikes whilst customers’ disposable incomes are being eroded by inflation most notably due to the spike in energy prices. It’s somewhat perverse that retail, which was amongst the sectors most impacted by Covid, is once again and so quickly set to bear the consequences of this cost-of-living crunch. The indications are that it may be a third consecutive tough Christmas trading period.

“This costs crunch comes as retail destinations and city centres continue to struggle in terms of shopper footfall with fewer commuters and business travellers.

“To help Scottish shoppers and storekeepers’ weather this storm we are suggesting concerted action to pep up consumer confidence and to cut the cost of doing business. It’s imperative the upcoming Scottish Budget is used to bolster shops and shoppers ahead of the economic tempest. In particular, the focus should be on protecting less affluent workers from income tax rises and shielding retailers from a further hike in the business rate.”