Scotland's Retail Sector 'Fragile'

25 June 2014, 06:21 | Updated: 25 June 2014, 06:23

Scotland's retail sector remains "in a fragile state'', according to a report.

More needs to be done to encourage both retailers and shoppers back into city and town centres to improve the picture, property company Colliers International said.

In a report on retail rents, the company found the sector is strengthening but average rents remain down 23% from 2008.

Around 70% of large retail centres across the country have managed to keep shop rental rates at a stable level while reducing incentives offered to new tenants, but traditional town centres are still struggling, the report said.

The removal of parking charges would be one way of helping shopping areas, it said.

Colliers director Tom Johnston said: "Any sign of an improvement in the hard-hit retail sector is good news. However, these are very small changes and have, in part, been helped by tenants requiring marginally less incentives, such as rent-free periods, to commit to deals.

"We are yet to see a significant increase in retailer demand and there may be some time before there is any evidence of a tangible improvement.

"In the meantime, Scotland's retail sector as a whole remains in a fragile state. A strong retail sector is important to the economic wellbeing of Scotland and we must look at innovative new ways to encourage retailers and shoppers back into city and town centres.

"National house builders could play a key role in this process and there is growing evidence that Business Improvement Districts may also have a positive impact.

"The relationship between pedestrianisation and footfall must be fully reviewed, to prevent future initiatives from inflicting further damage on retail businesses. In parallel, the time has come for local authorities to remove parking charges in certain city and town centre areas, which will help increase footfall and trade.''

The hosting of the Commonwealth Games in Glasgow has led to many developments being brought forward in the city and further redevelopments of centres such as Buchanan Galleries and the St James Centre in Edinburgh will lead to around one million square feet of new shopping areas in city centres.

At a local level, there is increasing demand for "value-driven schemes'' with retailers such as Lidl, Aldi, B&M and Poundland opening stores and improving choice for customers, the report added.