Decade-long leases for retail businesses must be removed to solve the blight of empty high street stores, MSPs have been told.
Encouraging landlords to offer shorter term lets to retailers will encourage more businesses to invest in Scotland’s towns, according to Martin Newman, a KPMG/Ipsos Retail Think Tank member.
He told the Scottish Parliament’s Economy and Fair Work Committee that the days of 10 to 20 years leases “were gone”.
Many retail units lay empty across towns and cities in Scotland as businesses struggle to afford the high rent costs, the committee heard. Newman said that these long-term leases hindered the profitability of retailers and were “essentially a noose around their neck”.
Newman, however, noted that independent stores, as well as larger chain companies, would be encouraged to return to town centres if they were not tied into “onerous” contracts.
“We need to do all we can to encourage landlords to recognise the days of being able to get somebody to commit for 10 or 20 years are gone.”
Pop-up stores, he suggested, were a way to incentivise business owners, particularly independent retailers “who historically might be reluctant to move from the one or two stores they have because of the “onerous nature and the cost of taking on additional leases”.
Newman added: “If landlords provide that flexibility then, I think, we will fill those empty spaces much quicker; they will be filled more readily and for longer periods of time.
“It’s about helping [landlords] understand the days of 10, 15, 20 or 25-year leases are gone; in my opinion.”
The committee were also told of the need to “diversify” town centres to encourage consumers to shop locally rather than online.
David Lonsdale, director of the Scottish Retail Consortium, told MSPs that retail sales last month had returned to pre-pandemic levels for the first time, however, consumer footfall has not caught up.
Newman agreed as he called on retailers to “up their game” to bring shoppers back into physical stores.
He said: “The experience of in retail environments has to become a bit more experiential that it has been previously - if we look at the empty spaces on our high streets at the moment, it can’t just be retail.
“We do need to think about the mix of retail proposition, it’s about creating an environment that pulls people in; if it’s only retail stores then I’d argue that’s not going to be enough.
“We need the right mix of food and beverage, entertainment and hospitality.”
The committee also heard support from Paul Gerrard, campaigns and public affairs director at the Co-op, and Maxine Smedley, head of stores at Boots, for an online sales tax which would “level the playing field” as online sales soars and high street stores struggle.
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