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Minister for Economy, Vaughan Gething MS
When the Welsh Government published the cross-government Economic Mission last year, it was clear a return to business as usual was not an option. This is particularly the case for the retail sector.
Retail in Wales is hugely important to our economy, our communities and our well-being as a nation. Retail is all around us, in every part of Wales, in every village, town and city, we value the jobs, goods, community services and benefits it provides. Our appreciation of the retail sector, as a cornerstone of the foundational economy, has only grown through the experience of the coronavirus pandemic. However, we know a successful and resilient retail sector does not happen by accident and neither should we assume that retail will always be there. Like many sectors of the economy, it’s important we nurture the environment in which it can grow and adapt, especially in response to shift to a more circular economy.
That is why it is important we have this shared vision for retail, developed in partnership with businesses and workers in the sector.
The retail sector is incredibly diverse, from international companies who are amongst the largest employers in Wales, to small independent enterprises making their mark. This diversity is a strength and has helped shape the adaptability and responsiveness of the sector to meet change head-on. Whether it’s been adapting to the demands of new technology, changes in consumer patterns or responding to the consequences of EU exit, the retail sector has had to continually innovate and reinvent itself. It must continue to do so as we face the headwinds of a cost of living crisis. COVID-19 has brought its own set of major and in some cases catastrophic, impacts on retailers large and small, but the core strategic issues the sector faced before the pandemic remain and in many cases are intensified. I firmly believe the retail sector has a vibrant future and will continue to be a key player within the Welsh economy, from local town centres through to our city centres.
The footprint of retail is by no means restricted to town centres, but nevertheless the changing face of our town centres is vital to retail and in turn our town centres need a successful and resilient retail sector. However, wherever retail happens, a workforce that is valued, well-trained and developed must be a core feature.
We are acutely aware there are no quick fixes, easy solutions or infinite budgets. What we do have however is a willingness to work in social partnership with Welsh Government, employers, business representative bodies and trade unions working together to understand where we are now, where we want to get to and how we can get there.
Last year, with the support of the Deputy Minister for Social Partnership we established the Retail Forum to begin this conversation. We published a Position Statement in March and this subsequent Vision sets out our actions to date alongside our future ambitions.
Over the coming months, we intend to develop a delivery plan, taking into account recommendations by the Senedd’s Economy, Trade and Rural Affairs Committee following its inquiry into the Retail (and Hospitality and Tourism) sector.
Finally and most importantly, I would like to thank Forum members for the time, effort and support they have provided in developing an agreed vision for the future of the retail sector in Wales and for their continued partnership working.
Deputy Minister for Social Partnership, Hannah Blythyn MS
As a labour-intensive industry, the retail sector is heavily dependent on its workforce, retail works best when its workforce has a strong voice and is treated with dignity and respect.
A better deal for retail workers, better pay, better terms and conditions, better training and better career prospects, will help the retail sector to overcome workforce recruitment and retention challenges, project retail as a long-term career of choice and equip the workforce to deliver even better levels of customer service.
That is why fair work is essential to the future of retail and is one of the keys to unlocking the door to a stronger, better, fairer and more sustainable future for the retail sector.
As we look ahead, it is increasingly urgent to ensure retail workers have a genuine voice, predominantly through their trade unions, in helping to shape their working conditions and the future of work in the sector. To this end, embedding the spirit of social partnership, where businesses and trade unions work together, must be a cornerstone of the retail sector of tomorrow.
As this Vision acknowledges, the Forum’s overarching ambition is that people can have good and secure careers in the retail sector, within a fair work environment.
We need to attract workers at a time of strong competition in the labour market.
The pandemic was a hugely stressful and challenging time for retailers, businesses and workers, all went above and beyond to ensure customers had access to goods and services and invested significantly to keep Wales safe.
We have no intention of giving up and have big ambitions.
The retail sector is diverse and dynamic, and undergoing a significant transformation, with changes in consumer behaviour, technological advances and accelerated growth in online shopping.
Retailers have a proven record of entrepreneurial and innovative approaches to meet customers’ needs and provide the best possible shopping experience. This will stand the sector in good stead as it evolves to meet the challenges and opportunities of the future, not least the cost of living crisis and climate emergency.
We strongly believe that retail remains critical in town and city centres.
A diverse high street of independent and small shops, alongside larger retailers, are at the heart of our communities.
While diversification will prove central to recovery efforts, the presence of retail in town centres and high streets is in line with public attitudes and expectations of the future.
Retail businesses need support to help create the town centre spaces we want to see. Every effort should be made to help draw people into town centres and help businesses reposition themselves for the next stages of economic recovery. We will also continue to work closely with the Welsh Government on how to improve our non-domestic rates system.
Achieving the vision for retail and rising to the challenge will take leadership from every layer of decision making and we welcome the Welsh Government’s continued engagement.
The Retail Forum was established in September 2021 by the Minister for Economy and Deputy Minister for Social Partnership to identify challenges facing the sector and inform the development of a retail strategy. The members of the Forum are:
- Welsh Government
- Wales Retail Consortium
- Association of Convenience Stores
- Wales TUC
- Bakers Food and Allied Workers Union
- Confederation of British Industry
- Federation of Small Businesses
- Chambers Wales
- British Independent Retails Association
Further details including terms of reference and the Position Statement can be found at: Retail Forum
Who is this vision for?
The retail sector is hugely diverse in terms of: size (small, medium, large); geographical area served (local, regional, national); business model (independent, chain, franchise); types of goods sold; type of consumer; type of workplace (shop, distribution centre, logistics) and presence (physical store, on-line, or blended).
The sector however, comprises far more than shops and customers and the delivery and impact of this vision for the retail sector will be wide-reaching and of relevance to a broad range of stakeholders including:
- Welsh Government
- local authorities
- transport providers
- the workforce and their trade unions
- businesses representative organisations
- supply chains
- non-retail high street / town centre businesses
- lenders and advisors
- training and skills providers
- careers advisors
Where are we now
As the largest private sector employer, providing jobs to over 114,000 people, and contributing 6% of the GVA, the retail sector is hugely important to the Welsh economy.
- 6% of Wales GVA
- 114,000 employees across Wales
- £32b in tax across UK each year (2018)
- 25% of all business rates for Wales (2018)
The importance of the sector is not limited to economic growth and job opportunities. The community benefits offered by national and local retailers go far beyond this and make a significant contribution to individual and societal well-being.
For many, especially those living in isolated or rural communities, the sector provides a vital opportunity for social interaction along with other important services such as access to post office services and cash machines. In addition, every year, retailers make significant investments in and donations to their local communities, helping to contribute to the development of inclusive, successful and resilient places.
- 2,975 convenience stores situated across Wales
- Of these 63% are rural, 22% are suburban, and 16% are urban
- 37% are located in an isolated area with no other shops or businesses close
Source: Earnings and Hours Worked, UK Region by Industry by Two-Digit SIC: ASHE table 5
Premises vacancy rate (Wales Retail Consortium figures)
- in the first quarter (Q1) of 2022, the Welsh vacancy rate decreased to 16.9%, from 17.5% in Q4 2021. It was 2.3 percentage points lower than the same point in 2021.
- shopping centre vacancies decreased to 24.0%, from 24.5% in Q4 2021.
- on the High Street, vacancies dropped to 16.9% in Q1, from 17.1% in Q4 2021.
- retail park vacancies increased slightly to 12.3% in Q1 2022, from 12.2% in Q4 2021. However, it remains the location with by far the lowest rate.
Footfall (Wales Retail Consortium figures)
- Welsh footfall decreased by 18.8% in March 2022, 1.6 percentage points better than February 2022. This is worse than the UK average decline of 15.4%.
- shopping centre footfall declined by 33.2% in March 2022 in Wales, an improvement on the decline of 43.6% in February 2022.
Sales volume (UK), Office of National Statistics (ONS)
- retail sales volumes rose by 1.4% in April 2022 following a fall of 1.2% in March 2022 (revised from a fall of 1.4%); sales volumes were 4.1% above their pre-coronavirus (COVID-19) February 2020 levels.
- non-store retailing sales volumes, which are predominantly sales from online-only retailers, rose by 3.7% in April 2022 led by stronger clothing sales
- food store sales volumes rose by 2.8% in April 2022, mostly because of higher spending on alcohol and tobacco in supermarkets;
- the proportion of retail sales online rose to 27.0% in April 2022 from 25.9% in March and remains substantially higher than the 19.9% in February 2020 before the coronavirus pandemic. (ONS)
- only 82% of local shops offer contactless payment (Association of Convenience Stores)
- only 51% of local shops offer mobile payment (Association of Convenience Stores)
What are the key challenges?
The retail sector is delivering in an operating context marked by significant transformation, change and ongoing uncertainty. Significant drivers include the changing role of town centres, the impact of new technologies, shifts in consumer patterns and behaviours and challenges in relation to the employment conditions, supply chain and workforce recruitment and retention. Overlaying this are the four core strategic challenges of our time:
- recovering from the impact of the coronavirus pandemic;
- addressing the demands of climate change and the move to Net Zero;
- responding to the cost of living crisis; and
- continuing to adapt to our future outside of the European Union.
Change, however, is not new for the retail sector in Wales. Even prior to Britain’s exit from the EU and the unprecedented pressures of the pandemic, the sector was already tackling the change in consumer habits and the increased use of digital technology.
There have also been concerns at a UK level of older workers leaving the workforce due to ill health or to take early retirement. This has come at the same time as record vacancies across the jobs market.
Research from the ONS note that of those older workers who have left their jobs since the start of the pandemic and not returned to work, 77% are in their 50s and 57% of those aged 60 and over left their jobs sooner than expected: Reasons for workers aged over 50 years leaving employment since the start of the coronavirus pandemic - Office for National Statistics.
Capital Economics have conducted research on labour shortages in developed economies Global Economics Focus: will labour shortages persist? They conclude that pandemic effects, such as virus fears, isolation and sickness are probably only responsible for about 20% of the ongoing shortages. They note that: “perhaps the most persistent shortages will relate to labour market frictions due to structural shifts in the types of workers needed and the preferences of workers themselves. The duration of this problem is very uncertain and will depend on how quickly firms and workers are able to adjust in terms of flexible working, relocation, and retraining”.
The challenges for the sector are significant and numerous. However, as we emerge from the pandemic we have the opportunity to forge a way forward that enables retailers to adapt to customers’ evolving needs and demands, respond to new technologies and to invest in its most critical resource, the workforce.
Areas of action
With a workforce of more than 114,000, the retail sector has a direct impact upon the lives, livelihoods and life chances of a significant proportion of the Welsh workforce and their dependents.
We recognise many retail employers apply the principles of fair work and provide attractive career options. We want more retailers to follow that path, so that retail becomes synonymous with fair work for all. We want to encourage and support the sector to address concerns about the quality of some retail work and its association with low paid, insecure and at times precarious employment.
Investment is skills will be crucial to both support the existing workforce and in attracting new entrants, at all levels.
Our overarching ambition is that people can have good and secure careers in the sector, within a fair work environment.
In turn, this will mean businesses are able to attract, retain and develop workers at a time of strong competition in the labour market.
The role of retail workers has never been so high profile as during the Covid-19 pandemic. Retail workers played a huge role in keeping our nation fed, with retailers investing heavily to keep their staff and customers safe. We must continue to recognise the value of retail workers, their skills and the range of roles they perform.
The 2021 Bevan Foundation report on Experiences in Retail indicates that terms and conditions in retail and in other foundational sectors are in need of improvement. Stronger worker voice, better management practices and fairer contractual arrangements (particularly in terms of hours and pay) should be at the core of improvement efforts.
A better deal for workers is central to a fairer, more equal and more prosperous retail sector. Not only is this the right thing to do by workers, but it also benefits workplaces and the economy and country as a whole.
The Welsh Government, alongside social partners, including the Retail Forum, will use every lever available to promote and enable fair work, address labour exploitation and tackle modern slavery. We want to see all workers fairly rewarded, heard and represented, secure and able to progress in a healthy, inclusive environment where rights are respected.
This includes the adoption of behaviours and practices that support workforce equality, diversity and inclusion, such as worker centred flexibility and job design.
Employers should spread good practice and aim for continuous improvement in these areas.
We want retailers to provide access to trade unions and to recognise the value of working and negotiating with trade unions and of working in social partnership on workforce development and other matters affecting the workforce.
In particular, our ambition is to see:
- the retail sector adopting social partnership as a preferred way of working, with retail workers having an effective voice in decisions that affect them and their working conditions.
- commitment to progressively improving pay, terms and conditions beyond statutory minimums, ideally through collective bargaining.
- greater security, particularly in ensuring workers being offered guaranteed hours and sufficient notice of changes in shift patterns.
- retail becoming an exemplar of workforce equality, diversity and inclusion – with proactive steps taken to address under-representation, occupational segregation and pay gaps.
The Welsh Government’s Economic Contract will continue to be a key element of its engagement with Welsh business to drive socially responsible business practices and a requirement for those seeking direct financial support from the Welsh Government.
What we’re already doing:
Fair work spans devolved and reserved matters, affecting what we can do on fair work and how we can do it. The Welsh Government is stepping up work to encourage and raise awareness of the benefits of fair work, decent working conditions and job quality, championing best practice and the positive role of trade unions. This includes looking at ways to improve access to information, advice and guidance on workers’ rights and employer responsibilities and continuing to promote and encourage Real Living Wage adoption.
We are also strengthening our Economic Contract so inclusive growth, fair work, decarbonisation and improved mental health at work are at the heart of everything we do, targeting business support and investment to those who set clear commitments to improving business practices.
Meanwhile, the Welsh Government is evolving and further embedding the Code of Practice on Ethical Employment in Supply Chains to strengthen its impact in tackling unethical employment practices.
We are improving awareness, understanding and adoption of anti-racist workplace practices, processes and cultures, through delivery of the Anti-Racist Wales Plan.
We continue to seek to influence reserved employment rights, duties and protections that will have an impact on workers and workplaces in Wales.
The Wales Retail Consortium (WRC) has set out a charter: Diversity and Inclusion Charter, for better jobs, with an aspiration for retail to be a leader in diversity and inclusion.
The trade union impact on pay in supermarkets
USDAW, Unite the Union and GMB organise workers in Wales’s supermarkets. Through collective bargaining, a new benchmark for pay was set at Morrisons when a minimum rate of £10 per hour was negotiated in January 2021 for retail workers.
Collective bargaining has also been a game changer at Tesco. In 2021, the retail workforce, represented by USDAW, negotiated a £10 per hour basic rate of pay (£5.55 higher than the statutory minimum wage for 16-17 year olds at that time). Eradicating age-related pay rates has made work fairer at these supermarkets, and unions have also negotiated greater security in relation to hours - the 2022 deal gives retail workers a right to request a ‘normal hours’ contract and ensures a minimum 16 hour contract for those that want it.
There is no collective agreement at Sainsburys and Asda, although unions are recognised for the purpose of consultation. To try to improve pay, terms and conditions in these workplaces, unions have been campaigning for better pay. The basic rate of pay for retail workers in Sainsburys reached £10 per hour in 2022, and Asda will cross the £10 per hour threshold by April 2023.
Making the workplace menopause-friendly
Trade unions work with their members to make sure the workplace is better for them – whether that’s to do with their caring responsibilities, their well-being, and a multitude of other factors. In the last decade, unions have been focussing on how the workplace needs to adapt to workers going through the menopause, and the symptoms they experience as a result of this.
Union action in the retail sector has taken different forms. Unions in the Co-operative group worked with the employer to negotiate a new menopause policy, including training for 4,500 managers following a survey which showed they did not feel confident support staff members who were going through the menopause or perimenopause. In Tesco, USDAW has worked with management to test new initiatives like more breathable fabric in uniforms, to help women be more comfortable at work.
The retail sector is not exempt from the pace and scale of change quickens in the world of work.. Often evidence has pointed to skill gaps in the existing workforce being a more substantial problem facing the industry than attracting new entrants into the sector with the skills employers need. However, the current tight labour market has combined these challenges.
There will need to be a continued push on high value training to equip the sector with a future proofed workforce. Skills will continue to be needed at all levels, particularly managerial and leadership roles and for customer service and sales occupations.
Customer service and sales skills are required in all sub-sectors of retail including, food retailers, department stores and specialist stores and of course, in online and telephone settings.
The sector needs to increasingly attract highly skilled and qualified individuals who are capable of implementing substantial technical change and realising the substantial opportunities this provides. This includes investing more in increasing the representation in the workforce of disabled people and people from ethnic minority groups and addressing occupational segregation, ensuring women are represented in managerial and leadership roles and that their role is not limited to the shop floor.
To have a secure career in the sector, there needs to be clear career paths and provision of career development to facilitate career progression.
The skills focus will be two-fold:
- upskilling the existing workforce and to support them in developing careers in the sector;
- attracting new entrants, at all levels, including amongst those returning to the labour market or seeking a career change.
What we’re already doing:
The Welsh Government’s new Plan for Employability and Skills, developed against a tough financial backdrop, including the loss of over £1.1 billion in post-EU funds, sets out the offer that is a crucial part of our collective task to make Wales an attractive prospect for more people and business.
We want to help everyone - particularly those furthest from the labour market - to navigate and respond to the work related challenges they will face throughout their lives, whether that is through training, retraining, upskilling, changing career or starting a business. It will help meet the skills required by Welsh businesses by making the most of our talent in Wales, driving workforce diversity and shaping an economy that works for everyone. It will also embolden more people to consider starting their own business.
The Welsh Government is investing £1.7 billionn in the Young Person's Guarantee, a package that includes £366 million to deliver 125,000 all-age apprenticeships during this Senedd term. The Working Wales service is the gateway into the Guarantee, providing a single point of access, plus high quality, impartial careers support, helping them with their steps into and along the road, of the world of work. They also host a job matching support service which helps young people identify and apply for the best career routes for them.
We are also expanding Personal Learning Accounts to support workers to upskill or reskill to access a wider range of job opportunities with higher pay as well as, amongst other things, our Flexible Skills Programme, which enables businesses to co-invest in skills development.
The Welsh Government continues to support the retail sector by offering an array of apprenticeships to meet the sector’s needs. It will likewise continue to encourage employers to deliver training at higher levels that will provide greater value to the businesses themselves and their employees.
Collectively, we will continue to urge the UK Government to withdraw the Apprenticeship Levy which continues to undermine Welsh policy priorities, cutting across the devolution settlement and impacting on employer relations in Wales.
The Wales Union Learning Fund (WULF) programme and the Wales TUC trade union education programme support trade unions in Wales to develop the essential skills and employability of the workforce, with a particular emphasis on removing barriers for traditional non-learners. More than £13 million has been made available to support trade unions deliver skills solutions and learning support to workers over the next three years.
The Association of Convenience Stores has created a People Hub which contains a suite of new advice and legal resources on recruitment, retention and progression as well as publishing a Wellbeing Guide with practical advice about how retailers can improve staff retention and customer service via a healthy, engaged workforce.
The WRC provides specialist programmes in a wide range of areas including leadership development and custom solutions.
Boots, the largest pharmacy-led health and beauty retailer in the UK, has served customers in Wales from the heart of local communities ever since opening its first store in Swansea in 1896. Today, Boots operates 100 stores in Wales and employs 1,600 staff. Boots is committed to workforce equality, diversity and inclusion – ‘we recruit great people and provide them with opportunities to develop new skills and progress their careers’.
Alex Williams started working for his local Boots store in Ebbw Vale at the age of 16 having finished his school exams. Employed as a part-time customer assistant on Saturdays, Alex completed healthcare and pharmacy assistant qualifications before being offered a full-time job working as a pharmacy assistant dispensing prescriptions. He then studied for an NVQ Level 3 in pharmacy services and became registered as a pharmacy technician.
Alex developed his leadership skills, resulting in him securing his first store manager position aged 22, where he developed a passion for retail and customer service. His career progressed via store management roles across Wales, before Alex was appointed manager of the Boots flagship store in Swansea. During this time, he also completed a CIPD Level 5 in Human Resources Management.
Alex moved into his current position as Area Manager for South West Wales in February 2020, where he is responsible for leading 22 stores and 375 colleagues. Alex said: “I have been lucky to work with amazing colleagues over the past 16 years, and I’m thankful to the inspiring leaders who have supported me. I am now in a position to use my experience to develop future leaders at Boots, which is incredibly rewarding.”
M&S: Breaking down barriers to work, turning around people’s futures
Marks & Start is a successful employability scheme run by M&S that helps people who are at a disadvantage in their job hunts, whatever prejudices they deal with daily. The programmes don’t just give people an insight into a career in retail, but also create a clear, accessible route into work.
The current format of the programme has run since 2014, supporting more than 800 young people across Wales during this time. M&S work with some brilliant programme partners including The Prince’s Trust and are humbled by the opportunity to meet such resilient and inspiring people, many of whom are now valued members of the M&S family. In fact, throughout 2021-22 81% of those who completed their work experience programme received a contract at M&S.
Our town and city centres are at the heart of place-making because their density means that shops, workplaces, leisure, culture and public services are near and if we don’t actually live in them public transport helps provide essential connectivity to them.
The Welsh Government has embedded the Town Centre First policy, in Wales’ national development plan Future Wales, meaning that town and city centre sites should be the first consideration for all decisions on the location of workplaces and services.
We have all failed to control out of town development and we need to mobilise alliances for change in our town centres to turn things round. We know that we can no longer rely on retail alone, so we must ensure we use the creative opportunities to bring new economic opportunity and employment back to the centre of our towns as part of a wider offer of activities and uses including leisure, learning, local services and cultural activities.
There is the opportunity to re-purpose buildings to create co-working spaces and encourage new green skills and opportunities such as repair cafes, reuse and refill retail and remanufacturing innovation to breathe life back into struggling shopping centres. The transition to a circular economy represents a key opportunity to support regional economic development by encouraging shorter supply chains and a more local and regional focus on sourcing materials.
Creating greener spaces with improved urban air quality will create more opportunities for living well locally, where the design, development and management of our towns and cities support people to meet most of their daily needs locally within a 20-minute neighbourhood. This will help us address climate change, meet our net zero ambitions, encourage healthier active travel options and reduce the need to travel unsustainably.
This creativity and repurposing is vital to reverse the hollowing out of town centres, to restore their vibrancy and to reconnect them with their hinterland supported by active and sustainable travel. We also need to make best use of existing town centre infrastructure.
We must lock-in the positive impacts of the pandemic such as reduced traffic, congestion and emissions and the town centres of tomorrow must be green and clean - places which are attractive to work, visit and live.
We support the long-term ambition for 30% of Welsh workers to be working flexibility and remotely, to help drive regeneration and economic activity in communities.
Town and city centres are the places most of us can walk, cycle or get public transport to and they provide common access points into many sustainable transport routes. We want better jobs and services in town centres where people can access them without needing to get in their car.
The Welsh Government will work with retailers on their experience of Nottingham City Council’s Workplace Parking Levy (WPL) - a charge on employers who provide workplace parking.
Nottingham City Council has introduced a WPL to tackle problems associated with traffic congestion, by both providing funding for major transport infrastructure initiatives and by acting as an incentive for employers to manage their workplace parking provision.
We also acknowledge the importance of anchor institutions, be they councils and hospitals or larger businesses, the foundational economy is the money that is spent or attracted by them – which in turn benefits communities and smaller retailers.
Anchor Institutions are central to the concept of community wealth building as a result of the scale of the jobs they provide, the scale of spend through procurement, their land and assets and the fact they are grounded in local communities.
On the non-domestic rates system, the ambition is to work together to assess options for differing approaches to the revaluation of non-domestic properties as part of the wider local tax reform agenda in Wales. It is recognised the current system is not perfect but alternative approaches need to be demonstrably better than the existing arrangements, not just different.
There is also a continuing need to develop the economy to ensure a firm footing for the Welsh language, in particular, growing communities with a high density of Welsh speakers.
While we cannot control every factor which influences economic growth, there are things which we can influence. These include skills, the prestige placed on the Welsh language and that the Welsh language is seen as a valuable skill with opportunities to use those skills in the retail sector.
What we’re already doing:
The Welsh Government’s Transforming Towns programme is enabling £136 million of investment in our town and city centres. A further £100 million has been allocated over the next three years to continue to help revitalise town centres. The focus of the Programme is revitalisation and the sustainable growth of our towns through interventions such as reuse of derelict buildings; increasing the diversity of services in towns; creation of green space and improving access. The funding plays an important role in supporting the location of services in town centres which might otherwise have been located elsewhere.
The Welsh Government has also published its Remote Working Strategy. It outlines our approach to achieving 30% of the Welsh workforce working at or near to home in this Senedd Term.
We are promoting a network of remote working hubs/local workspaces. We hope local work hubs will bring more people into the heart of their community where they will spend their working day, do their shopping, buy lunch and socialise or take part in activities. Research is currently underway via our network of pilot hubs to assess uptake, benefits and successful delivery models.
More remote working means people can work, and live locally. Early indications are that larger centres will be able to reinvent themselves, but there are likely to be particular risks for urban areas with lower levels of amenity, of which there are a number of examples in Wales.
A report commissioned by Welsh Ministers: Wales Centre for Public policy Remote Working indicates that there may be a shift in footfall from city centres to the suburbs as people spend more time at home or in their local area, but that cities will survive through adapting design and use of urban space. We need to monitor the situation to understand evidence to inform policy decisions in the recovery period and beyond.
The Federation for Small Business’ report ‘A Vision for Welsh Towns 2022’ included a recommendation that retail – particularly independent business- remain at the heart of a positive conversation of what we want our towns to be.
Earlier this year (February 2022) the Institute for Placement Management produced a report on ‘The Contribution of Booksellers to the Vitality and Viability of High Streets’. The research showed just how much bookstores do to make high streets vital and viable. From supporting schools and voluntary groups, to providing performance space, creating festivals and events – and often providing space for breastfeeding.
The Association of Convenience Stores’ 2022 report on Welsh Local Shops noted their particular importance and prevalence in rural areas of Wales. It has set out a guide for retailers on building relationships with local communities.
In addition, the WRC’s report into charitable giving in 2019, showed Welsh retailers had raised or donated over £9 million million to good causes.
The report provided fantastic examples of how retailers up and down the country work in partnership with charities and groups to make a real difference to local people and communities. The 2020 report will be published later this year.
The Welsh Government’s strategic plan ‘Welcome to Wales: Priorities for the visitor economy 2020-2025’ sets out a purposeful place-making approach to town centre and local community regeneration - creating local destinations that reflect the distinctive character, attractions and facilities that future visitors will be looking for.
The Welsh Government’s work to further improve digital connectivity across Wales will build on a number of existing interventions including a £10 million Local Broadband Fund and a range of voucher schemes to help those without access to superfast broadband. This is in addition to its current roll-out out of full-fibre broadband with Openreach to around 39,000 properties using £56 million of public funding.
The Welsh Government has invested over £80 million since 2016 in active travel which will, amongst other things, improve access to town centres, employment, education, key services and other important locations. Investment in Transport Metros since 2017 will surpass £1.6 billion.
The Welsh Government is also consulting on its White Paper on proposals to improve bus services and grow the bus network. This includes requiring the franchising of bus services across Wales to help meet public needs, maximise the value we get for public investment in bus services and break our reliance on private cars.
The Deputy Minister for Climate Change’s Town Centre Action Group is overseeing the implementation of the recommendations made in Professor Karel Williams’ report Small Towns, Big Issues and Regenerating Town Centres in Wales, prepared by Audit Wales. The Group is also leading on finding ways to encourage town centre development and discourage out of town development.
The Group is also looking at how we can further streamline the funding offer under the Transforming Towns programme, simplify its processes and involve communities in what happens in their town. The progress of this work will help shape future actions around delivering our vision for the retail sector.
Elsewhere, the Welsh Government’s Foundational Economy Delivery Plan sets out the policy interventions to strengthen the foundational economy and localise expenditure.
In 2021-22 over £620 million in non-domestic rates relief was provided to support businesses, this included all retail, leisure and hospitality businesses with a rateable value of £500,000 or below receiving 100% rates relief. As a result of these relief schemes, over 70,000 Welsh businesses paid no rates at all for the year.
In 2022-23, the Welsh Government continues to support the retail sector through recovery by providing £116 million of targeted non-domestic rates support to businesses in the retail, leisure and hospitality sectors. Ratepayers will be eligible for 50% off their liability for the financial year. The amount of relief under the Welsh Government’s Retail, Leisure and Hospitality Rates Relief (RLHRR) scheme will be capped at £110,000 per business across Wales. Our approach means that businesses in Wales will receive comparable support to that provided in other parts of the UK.
Alongside providing rates relief support, we opted to freeze the non-domestic multiplier for 2021-22 and 2022-23. This is to prevent increases in rates bills for ratepayers and provide continued support to businesses during these challenging times.
Within this context and building on the work we carried out over the previous Senedd term, we will continue to consider how to improve our non-domestic rates system while sustaining vital revenue for the local services, this will include reviewing all relief schemes to ensure they are fit for purpose and providing support to areas of the tax base in the most effective and efficient way. Future decisions about non-domestic rates will form part of these wider local taxation reform considerations.
Ensuring retailers of all sizes are prepared for the move to net zero is a key priority in realising our vision for the sector and meeting the Welsh Government’s net zero by 2050 target.
For the retail sector, this means reducing the use of energy, in particular energy derived from fossil fuels for transportation and presentation of items for retail. Retail premises should be energy efficient, heating and lighting should use low energy technologies, where practicable renewable energy should be used for both retail premises and transportation. Retail premises should, as far as practicable, be used as locations to generate electricity from solar panels, heat pumps and other appropriate technologies.
Further, as far as practicable, retail premises should be used to promote biodiversity. Retail premises can be locations for nesting boxes and for window boxes – and similar - for plants which encourage pollinators. Where retail premises are part of shopping centres, energy use and biodiversity can be promoted as part of a retail community effort. Plants, shrubs and trees can be located to encourage biodiversity and improve the environment for customers.
Shopping centres can use solar panels, heat pumps and other emerging technologies to generate electricity in more sustainable ways.
Businesses will need to change in response to a shift to a more circular economy and recognise the economic opportunities which exist in adding value to and using recycled resources and the potential of improving supply chain resilience.
Looking at the long-term need for key materials in Wales, reducing the carbon footprint of supply chains and purchasing lower carbon products, will take a whole life cycle approach and incentivise better product design to allow for materials to be in use for as long as possible.
In order to go beyond recycling, businesses will seek to prioritise re-used, repaired and re-manufacture products wherever possible. Businesses will also grow opportunities for zero waste shops, refilling of goods, plastic free retail, upcycled, remanufactured and repaired goods and support an expansion in hiring, leasing and lending, capitalising on the Circular Economy Fund.
Retailers recognise the impact of single use items and support the Welsh Government’s ongoing consideration around introducing bans or restrictions on several single-use items and considering re-usable alternatives.
In addition, to decarbonise through greater resource efficiency and better resource management, retailers will be expected to support the Welsh Government’s ambitions to bring forward Deposit Return Scheme for drinks containers and new recycling regulations to require businesses and other non-domestic premises to separate their waste streams.
They will also more closely monitor their wastes, helping them to reduce and recycle more and continue to enforce the single use carrier bag charge.
It is noted the Welsh Government is working with the other governments of the UK to also develop an Extended Producer Responsibility (EPR) Scheme for plastics and to bring forward the legislation to support its implementation.
The retail sector recognises the inherent benefit of working to net zero. The challenge for the sector is how to offset the benefits of this against a reduction in revenues. A reduction in journeys made will inevitably continue to rise as more workers move to a hybrid model of working. This will continue to impact on sales and revenue.
The sector does have an opportunity, particularly in the snacks and food sector, to deliver to homes and working hubs but every strategic decision taken must be through the lens of net zero and of a just transition and under non-exploitive conditions. Purchases and investments should be net zero ‘compliant’.
We will promote the participation in Business Wales’ Green Growth Pledge as well as encouraging retailers to promote local, more sustainably sourced food and promote the appointment of trade union Green Representatives in the workplace.
What we’re already doing:
The Welsh Government published its Net Zero Wales Carbon Budget 2 (2021-25) in October 2021 ahead of COP 26. It sets out how it will take more than Government action to deliver Carbon Budget 2 and we need everyone, including businesses to play their part in achieving Net Zero.
A key theme is just transition – how we ensure we leave no-one behind as we move to a cleaner, stronger, fairer Wales. This Plan throws this issue into the spotlight, recognising this decade of action as a pivotal moment to develop green skills for the jobs of the future as well as developing a better understanding of the impacts of change, and how to make sure these are fairly distributed in society.
The Welsh Government has invested over a billion pounds into waste and recycling infrastructure and we will continue and expand funding to regional infrastructure across Wales to ensure that materials are supplied to meet business and citizen need.
This will include community infrastructure such as repair and reuse facilities and the capacity to reprocess and recycle more materials. This will work to retain the value of these materials here in Wales and create more resilient employment opportunities by better connecting the collection and processing of resources to the businesses and enterprises that need them.
Furthermore, Beyond Recycling, the Welsh Government’s plan to make the circular economy in Wales a reality was published in March 2021. Beyond Recycling sets out a commitment to developing a universal culture of re-use, repair and remanufacture. This will not only prevent waste and help to decarbonise, but also enable us to realise the economic and social benefits.
In October 2021, the Welsh Government published the Electric Vehicle Charging Strategy: Action Plan, setting out its plans for charging electric cars and vans in Wales. Technological change will influence the shape of electric vehicle charging infrastructure in the future, including improvements in battery technology, micromobility, autonomous vehicles and use of hydrogen and other alternative fuels. As the electric vehicle market grows, user behaviours will evolve. These aspects will be kept under review as part of ongoing delivery.
The Welsh Government is supporting this transition. Business Wales provides a specialist resource efficiency advisory support that covers all aspects from energy and waste to water efficiency measures. It also provides a Green Ambition resource to improve knowledge and understanding of resource efficiency and help take action to mitigate business impact on climate change.
In the lead up to COP26, leading retailers galvanised collaborative efforts and showcase industry-wide support to reduce greenhouse gas emissions. The WRC produced a Climate Action Roadmap that is a framework to guide the industry to net zero.
WRC’s Better Retail Better World campaign commits the retail industry to build a fairer, more sustainable economy in line with the UN Sustainable Development Goals.
In addition, many retailers have signed up to The UK Plastics Pact, led by WRAP. Members have committed to eliminating problematic plastics reducing the total amount of packaging on supermarket shelves, stimulating innovation and new business models and helping to build a stronger recycling system in the UK. The Pact also commits to ensuring that plastic packaging is designed so it can be easily recycled and made into new products and packaging.
The Association of Convenience Stores also provides a range of best practice advice.
Environmental training at Greggs
Greggs has been working with the Bakers, Food and Allied Workers Union (BFAWU) to train staff and raise environmental awareness.
In a pilot phase, BFAWU set out how their H&S reps would initially become SHE reps (health safety and environment) which Greggs supported. The BFAWU trailed the course with their National Health and Safety Reps to see how the materials went down with reps and whether there was anything missing before rolling out to the wider reps.
Greggs were very keen to work with the union on this agenda and offered to produce some training that was relevant to the company as well as being acceptable to the union.
There are currently four sections to the training:
- an introduction looking at carbon footprints, what it is, what it looks like for Greggs, why the union is involved, and how to reduce it.
- energy use, looking at where energy is used, where the company gets it from, using the Energy monitoring tool on the intranet.
- waste management and reduction which includes reuse and recycling.
- a mop up module covering water use and other elements.
One example of how this has helped to make the workplace greener is a change in practice to how they use the dishwasher, making sure it’s not turned on when this isn’t needed. By turning a dishwasher on at 9.00, instead of when workers get in at 6.00, it doesn’t make a massive difference for the one shop alone, but if you multiply that small saving in energy by 1700 plus shops it makes a huge difference for the company across the UK.
Changing consumer habits and the implications of the cost of living crisis/EU exit
The cost of living crisis will impact on consumer habits with potentially serious implications for the retail sector. There will be an inevitable impact on those retailers who trade in discretionary goods and services given that consumer expenditure on discretionary items is likely to be the first sacrifice in any squeeze on personal finances.
Similarly, there will be expectations and pressures on those retailers who trade in essential goods and services, given the impact that rising prices will have on household incomes.
In terms of energy costs, the cost increases for businesses are just as eye-watering and just as consequential as those for consumers. For some retailers a cash increase in their energy bills of £20,000 would require an increase in sales of nearly £100,000 to pay that billl. Rising product and wage costs compound these pressures.
Collectively, we recognise these significant pressures and where levers lie with the Welsh Government, careful consideration will be given around any choices that could further add costs to retailers or where direct or indirect support may be possible.
Where levers lie with the UK Government, such as general taxation and benefits, we will work collectively to put forward proposals.
In terms of EU exit, retailers are having to adapt to the new UK-EU trading relationships which has resulted in increased complexity and cost in the import and export of goods.
Additional documentation, an increase in shipping costs, supply chain issues and HGV driver shortages are all negatively impacting the sector, with the problem being hugely exacerbated by Covid.
Issues facing HGV drivers appear to go beyond the impact of EU exit. Low pay and poor conditions are resulting in drivers moving to other sectors, particularly those working in rural areas who command a lower rate of pay than those working in urban areas.
Analysis by academics, UK in a Changing Europe: Post-Brexit imports, supply chains, and the effect on consumer prices, shows that Brexit has pushed average food prices up by about 6% in 2020 and 2021, with the strongest increase following the commencement of the UK-EU Trade Agreement.
What we’re already doing
The Welsh Government has used its main levers to put cash in customers’ (and workers) pockets. Since last November, we have invested more than £380 million in a package of support for low income households to meet the immediate and severe pressures on living costs.
In areas where we have seen the labour market tighten, the Welsh Government provided an additional £5 million for Personal Learning Accounts - targeted at sectors including HGV and hybrid and electric vehicles.
We urge any business needing support and advice to get in touch with Business Wales in the first instance.
Furthermore, all members of the Retail Forum have advisory services for their members and are on standby to assist.
Increased use of digital technology
The use of new technologies in non-online retail settings has transformed the nature of retail work for virtually everyone. As retail changes and stores adapt to offer customers more varied, multichannel experiences, retail staff are having to undertake new tasks requiring a more diverse array of skills, including utilising digital technology, requiring staff to quickly adopt new skills and adjust to a frequently changing workplace.
New technologies have made work more fulfilling for some - removing the need to do mundane, repetitive tasks for example, and providing workers with new skills. In some cases, however, the use of new technologies has had a negative impact, with some staff being displaced and no evidence of the productivity gains being fed through to the workforce in terms of better pay and conditions.
The huge growth in online retail has led to a significant growth in ‘unseen’ retail work in the UK. In particular, the growth of distribution work has been significant.
The UK Government’s consultation on Online sales tax ended on 20 May. The consultation explored the proposal for an online sales tax as a means to rebalance the taxation of the retail sector between online and in-store retail.
The jobs created in online retail do not compensate for the job losses experienced across the sector – far fewer workers are required in comparison to larger department stores, for example. The Centre for Retail Research has estimated that for every 10 jobs lost in non-online retail, only two or three are created online: Centre for Retail Research The Crisis in Retailing: Closures and Job Losses.
In addition, automation will reshape retail business models and the broader value chain, potentially creating fewer layers and a workforce empowered by real-time data and analytics. The sector will need to continue to adapt and track trends and implications and act quickly to address them. A stronger voice for workers will help ensure that technology is not introduced in ways that benefit the employer at the expense of the worker.
What we’re already doing:
In March 2021, the Welsh Government published the digital strategy for Wales which sets a clear vision and ambition for a coordinated digital approach across sectors in Wales.
The Welsh Government recognises the acceleration of digital change in recent years. We are committed to empowering people and businesses to be digitally confident and take full advantage of the opportunities that digital technologies offer. This includes supporting businesses in Wales to have access to the skills they need to be able to innovate, grow and thrive.
In particular, the Welsh Government is supporting the Near Me Now: pilot digital high streets project, see case study.
On 10 May, the Association of Convenience Stores held a Technology Showcase event providing a unique opportunity for suppliers to showcase new technology solutions that have either been recently launched, or will be launched in the future.
The following WRC site provides details of past and future Digital Retailing events and advice.
Near Me Now: Pilot Digital High Streets Project
VZTA Destination Management Software, VZTA is a unique digital platform designed for the benefit of all stakeholders involved in the economic development and regeneration of towns. It has been trialled in three areas with 5 local authority stakeholders signed up.
The project has been created both with and for local businesses and local authorities, with the overall aim of supporting the digital transformation of towns and enabling them to work collaboratively to set a new standing in the digital age.
A fully functioning community commerce platform will enable businesses to advertise products and services in real time, meeting the needs of the community and creating fully digital, fully searchable high streets across Wales.
There are three legs supporting the VZTA digital platform:
Local authority: log onto a web-based platform and either draw a ‘geofence’, a line to outline a high street or import geographic information system (GIS).
- local authorities and town stakeholders can engage and communicate with all businesses within their areas from a desktop pc, freeing up valuable resource
- unlike directories that become stale and outdated quickly, businesses that are no longer trading can be switched off by the local authority or town stakeholder
Key Stakeholders: businesses register on the platform, advertising services and products in real time.
- businesses decide what their customers see in the platform and when and how long it is visible to their customers
- business do not compete or pay for a higher ranking in the platform; it is a level playing field
- business contact data is kept up to date automatically
Customers engage and use the platform to search for services/products.
- consumers have one digital access point for towns that can be accessed when at home, office or co-working space from a desktop pc or from a mobile app when engaging with their surroundings
Alongside the town retail offer, the system will support tourism, arts and culture, town trails and food & drink and will enable people to engage with their towns on both a virtual and physical basis; using technology to restore a sense of community; leaving no town behind.
Retail Crime and Violence
Figures from the Association of Convenience Stores and USDAW show that around 90% of retail workers are abused by customers simply as a result of doing their job.
While threats, abuse and violence against retail workers has increased significantly since the start of the Coronavirus crisis, it must not be forgotten that various bodies were noting a significant increase in issues in the years before the Covid-19 pandemic. Alongside abuse of retail workers, the sector has experienced significant increases in theft, robbery and fraud, as reported in the WRC’s Crime Report.
Retailers have invested significantly in crime prevention measures to support staff and protect their businesses.
What we’re already doing:
This increase in retail crime is damaging to the sector and the wellbeing of the workforce. Significant work has already been undertaken across the sector to improve reporting processes and invest in relevant technology. Further efforts to tackle the issue will include Government, retailers, trade unions and the Police working in partnership to deliver protection for all retail employees and to prevent and deter incidents of shop theft and retail crime.
Comprehensive advice from the WRC is also available: British Retail Consortium: violence and crime.
Violence against shopworkers
Ending retail violence has been a core campaign priority for USDAW for many years. Since 2007 USDAW has surveyed between 1,500 and 7,000 shop workers each year to gather first-hand accounts on the extent of violence, threats and abuse against shop staff. In recent years, this survey has shown that threats, abuse and violence against shopworkers continue to be a widespread and growing issue for retail workers.
Between 2015 and 2019, of those retail workers taking part in the survey, the number of workers experiencing verbal abuse increased from just over half to around two-thirds, whilst the number threatened during the course of their duties increased by around a third. Even prior to the significant spike in abuse, threats and violence seen during the Coronavirus crisis, overall trends show increases that should not be ignored.
One part of the campaign against retail violence is Respect Week, during which USDAW reps typically run around 1,000 stalls in retail premises across the UK, educating the public about the impact of abuse against shop staff. This has also been supported by some retail employers, who have run in-store announcements, displayed posters and taken other steps to remind customers to show respect to shopworkers. The Union is also calling for the UK government to introduce new legislation to protect retail workers from threats, abuse and violence.
Advice and Support
No matter the size of a business, further advice and support is always welcomed. Furthermore, when starting or growing a business it can often make or break the survival of the business.
We want to develop a culture of entrepreneurship and enable businesses in the retail sector to be resilient and innovative.
The Welsh Government’s Business Wales service provides impartial, independent support and advice to individuals who wish to start a business or those who run and aim to grow an existing business in Wales. Business Wales provides digital information, guidance and support, virtually and face-to-face.
Experienced business advisors can support businesses within the retail sector to develop their business capability in areas from financial management, to employment practices, to improving resource efficiency. Social Business Wales provides dedicated support and advice social enterprises to start and grow their business.
In addition, there is the Development Bank of Wales, a national financial institution set up by the Welsh Government to enable businesses to get the finance needed to start up, strengthen and grow. It can provide loans from £1000 right up to £10 million, as well as mezzanine and equity funding; and helps businesses find the right finance partner to leverage in private finance with its own gap finance when necessary.
What we’re already doing:
During the pandemic, Business Wales played a key role in not only supporting and providing advice but directing business to available funding sources. This included the Welsh Government’s Economic Resilience Fund, which provided over £2.6 billion of financial support to Welsh businesses during the pandemic, including to thousands of retail businesses.
The Welsh Government also made Non Domestic Rates grants available to retail businesses during the Omicron variant, whilst they were not available to counterparts in England.
Since 2016, the Business Wales service, has supported the creation of 25,000 jobs across Wales, including the creation of over 5,000 new enterprises and 2560 businesses have adopted or improved practices with regards to Equality and Diversity, actively committing to the Business Wales Equality pledge.
As at 30 September 2021, the Development Bank of Wales had directly invested over £1 billion in Welsh businesses and helped create over 26,500 jobs.
The Welsh Government has also pilot funded (£3 million) a one year scheme to support small businesses in town centres.
The pilot will target four towns prioritised in the North Wales Regeneration Plan, Wrexham, Rhyl, Colwyn Bay and Bangor and will comprise a Grant offer as well as a Loan offer.
As noted earlier, cost barriers associated with set up in a Town Centre can act as a disincentive to new entrepreneurs who are considering where to base their business. The Fund is intended to help mitigate some of these disincentives to new entrepreneurs.
Alongside the previously mentioned employability and skills support, business rates relief and Transforming Towns funding, the last financial year saw: a £1 million Backing Local Firms Fund for the foundational economy; a £1 million NEET focussed business start-up fund; and an additional £500,000 to support and promote the social enterprise sector
The pandemic also saw a range of workplace guidance co-produced with social partners in order to keep businesses, workers and customers safe. This included bespoke retail action cards so that retailers were fully aware of their responsibilities, and a workforce rights and responsibilities campaign, to raise awareness of workers’ rights and employers’ legal responsibilities.
Around 400,000 workers in the Wales are in a union, from nurses to pilots, actors to lorry drivers.
Joining a union is affordable and easy, and the benefits are huge. Any worker has the right to be in a union.
Unions help workers come together, demand a better deal from their employers, and raise standards for all of us.
Unions are the reason we all enjoy paid holiday, maternity leave, and lunch breaks. They’ll offer you free legal advice if you need it, training and learning opportunities, and even discounts and offers.
For workers, if you’re not sure what the right union for you is, visit TUC: join a union to find out.
USDAW: is a trade union organising and representing workers in the retail, distributive, manufacturing and service sectors.
Unite the Union
Unite the Union: is a general union representing workers across the country and in all industrial sectors. The Community section of Unite also covers people who are out of work, including students, volunteers, retired people, people who are unemployed.
GMB union: is an organising and campaigning union for all workers, with members who work in every type of job across the public, private and third sectors.
The Bakers, Food and Allied Workers Union represents workers in the food and allied industries and trades.
How will we realise our vision?
1. Working in social partnership
Social partnership is an established way of working in Wales that enables us to develop shared approaches to collective challenges and opportunities. Bringing together Welsh Government, employers and trade unions provides us with the opportunity to resolve difficult and challenging issues in a constructive way and the opportunity to develop the approaches needed to deliver mutual benefits for workers and employers.
Realising our shared vision for a successful, sustainable and resilient retail sector that offers fair, secure and rewarding work can best be achieved through social partnership.
Working together in social partnership, collaboratively and across boundaries, will deliver the change required to support a retail sector that will go from strength to strength and works for all.
2. Delivering our shared priorities
A stronger, more resilient retail sector.
A key priority is building the resilience of the sector so that it is fit for a new future. As we emerge from the pandemic but face a cost of living crisis and the climate emergency, we must understand the impacts on the sector and consumer habits, and the role retail now plays in the town centre. We must also prepare for jobs changing, employees staying in work longer in life and reskilling workers, ensuring the workforce is equipped with the digital skills needed for the future.
We must also continue to work in social partnership to build on and spread good practice and increase the prevalence of fair work throughout the sector. Better and more secure working conditions are key to building the resilience of the sector and overcoming its recruitment and retention issues.
A fairer retail sector
Making work fairer, more secure and better for all is a priority agenda for the Welsh Government and the Retail Forum is committed to working in social partnership to advance these aims.
A greener retail sector
Ensuring retailers of all sizes are prepared for the move to Net Zero is a key priority in realising our vision for the sector. Welsh Government cannot achieve the move to net zero alone.
3. Keeping the conversation going
This vison for the retail sector in Wales marks just the beginning of an ongoing dialogue within and about the sector. Government’s understanding of the importance of the sector to our economy and society is now firmly embedded and this will be reflected in future policy development.
We remain committed to an ongoing conversation, through the Retail Forum to address not just the current pressures but the future and possibly unknown challenges of the future.
Over the coming months we will collectively develop a delivery plan, taking into account any recommendations by the Senedd’s Economy, Trade and Rural Affairs Committee following its own inquiry into the Retail (and Hospitality and Tourism).