SGF: regulation tsunami could drown thousands of local retail businesses

The Scottish Grocers Federation (SGF) has today hit back at the deluge of new regulation expected to land on small convenience retailers in 2024/25. It highlighted how a torrent of restrictions across a range of product areas, on top of issues such as retail crime and reduced business rates relief, could spell the end for many vital community services.

For communities across Scotland, local convenience stores boost crucial local employment, enable growth as key local economic multipliers, and provide essential goods and services within their local area.

However, SGF has raised concerns that both governments in Edinburgh and Westminster are failing to recognise what can reasonably be delivered by convenience retailers and could potentially suffocate businesses with overregulation. All but ensuring some stores will no longer be viable in the coming years.

It is expected that by the end of 2025, the sector will face at least six new areas of regulatory burden, including:

· In-store restrictions concerning the placement and marketing of alcohol products, one of Scotland’s most celebrated industries. In addition to a rising Minimum Unit Price on alcohol products.

· Restrictions on the promotion and location of dozens of HFSS food items.

· Potential restrictions on the visibility and sale of vaping products in store.

· A generational ban on the sale of tobacco products.

· Requirements to meet new net-zero targets relating to the Circular Economy Bill and WEEE regulations, including changes to waste and recycling management.

· A UK-wide deposit return scheme.

Meanwhile, retailers are facing an increasing surge in retail crime, impacting every part of the sector and the wellbeing of both staff and communities.

SGF’s latest research shows that retail crime in Scotland has an average cost of £12,000 per convenience store per annum and has called for an emergency plan to be put in place by minsters to tackle the growing problem.

Likewise, real terms reductions to business rates relief for small businesses means that some Scottish convenience stores are now operating at a considerable disadvantage to their English counterparts, possibly jeopardising the livelihoods of 49,000 people who are employed in the Scottish convenience sector.

“We are warning ministers now, this direction of travel will result in stores that are lifelines for their communities turning off the lights for good," said Dr Pete Cheema OBE, SGF Chief Executive.

“Our governments have said they want our local businesses and communities to flourish, to promote local living, local produce, and local services. In reality, they are doing everything they can sink thousands of essential local businesses across Scotland.

“Regulations and restrictions always fall hardest on smaller businesses, most of whom just don’t have the capacity or resource to cope with change after change. Moreover, it fails to account for the devastating impact of external factors such as inflation, energy prices and the cost-of-living crisis.

“SGF believes in responsible community retailing, and we want to help make our country a better place to live. Instead of attacking well-meaning businesses, ministers need to think again and come up with a joined-up and workable approach to introducing new regulation.

“It’s the easy road for ministers to place ban after ban on our sector, but what will remain once the dust has settled?”