Retailers in Scotland have urged the Scottish Government to rule out new taxes on the sector, reduce business costs and abandon plans for a statutory food price cap ahead of Scotland’s 2027-28 Budget.
The Scottish Retail Consortium (SRC), which represents retailers operating in Scotland, has put forward 21 recommendations aimed at supporting consumer spending and retail investment as businesses face subdued demand and rising operating costs.
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Its submission to Finance Secretary Jenny Gilruth covers taxation, business rates, household finances and retail crime. The Scottish Budget is due to be announced on 3 December.
Retailers oppose new costs
A central demand is for the Scottish Government to avoid imposing additional costs on the retail sector.
The SRC wants ministers to rule out new retail taxes, including levies affecting retail warehouses. It also wants ministers to limit additional regulatory costs and abandon plans for a statutory food price cap.
The Scottish Government is consulting on proposals that would allow legal price caps to be imposed on selected essential food products sold by large supermarket chains, including online.
The SRC argues that additional costs for retailers could make it harder for businesses to keep consumer prices down.
David Lonsdale, director of the SRC, said retailers were facing pressures from both international instability and domestic policy.
“The industry is looking for an unabashed Budget for shoppers,” Lonsdale said, adding that retailers needed measures that would help them keep costs down for Scottish households.
Business rates reform
The SRC is also seeking changes to Scotland’s business rates system, a property-based tax paid by occupiers of commercial premises.
It wants the Scottish Government to establish a timetable for making the system at least as competitive for retailers as the equivalent regime in England.
Business rates are particularly significant for store-based retailers because they add to the cost of operating physical locations, regardless of sales.
For the 2026-27 financial year, the Scottish Government introduced 15% rates relief for eligible retail, hospitality and leisure properties with a rateable value of up to £100,000, subject to a £110,000 annual cap per business.
The SRC is seeking a longer-term approach, arguing that a more competitive business rates system would support investment in stores, high streets and other shopping destinations.
Supporting consumer spending
The trade body has also called for changes to Scotland’s income tax policy to increase consumers’ disposable income.
Scotland sets its own income tax rates and bands for most non-savings and non-dividend income, which differ from those applying elsewhere in the UK.
The SRC wants a plan to narrow the gap between Scottish and UK income tax rates for intermediate, higher, advanced and top-rate taxpayers.
Its recommendations come amid signs of continued caution among Scottish consumers.
Retail footfall in Scotland fell 0.1% year on year in August, according to SRC-Sensormatic data, following three consecutive months of growth. Retail parks performed better, with visits increasing 2.5%, while footfall rose 0.6% in Edinburgh and 0.3% in Glasgow.
The SRC argues that strengthening household purchasing power while containing retailers’ operating costs would help support consumer spending.
Retail crime funding
Retail crime is another priority in the Budget submission.
The SRC wants additional funding for Police Scotland’s Retail Crime Taskforce, alongside greater resources for Trading Standards authorities to tackle illicit traders.
The organisation has highlighted retail crime as both a cost and a safety issue for the sector. It argues that stronger enforcement would help improve safety in Scotland’s high streets and other shopping areas.
Retail’s economic role
Retail is Scotland’s largest private-sector employer, directly supporting around 228,000 jobs, according to the SRC.
Lonsdale said the forthcoming Budget was an opportunity to “balance the books, support shoppers and retail businesses, and kickstart economic growth”.
The Scottish Government provided business rates support for retail, hospitality and leisure businesses in its previous Budget. It said more than 96% of properties in those sectors would pay either no business rates or reduced rates in 2026-27 after applicable reliefs were taken into account.
The SRC is now urging ministers to go further by reducing business costs and pursuing policies aimed at strengthening household spending and retail investment.
