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The Scottish government has revealed it’s considering giving consumers shopping vouchers in order to boost local businesses after Northern Ireland introduced a similar programme in November.
Northern Ireland has earmarked £95 million for creating prepaid cards of up to £100 that every adult will be able to use in bricks-and-mortar shops in 2021. The hope is that the vouchers will kick-start local economies after the Christmas spending boom fades.
Will Docker of the St Andrews-based farm shop Balgove Larder said he would welcome “any scheme that supports businesses that promote localism”.
He believes a voucher scheme could have a positive impact on independent businesses in Scotland, which in turn would support the wider local economy and community. “It’s also a nice reminder about the important role that many such businesses have played during this crisis,” Will added.
“At Balgove Larder we work with a huge number of local food and drink producers, so those spending locally mean so much, not just to us, but to all those in the local supply chain. This could be a really powerful support mechanism,” Will said.
Footfall at retail destinations has continued to increase in the run-up to Christmas, with Springboard data from 7th December showing an rise of 60% week-on-week. “The uplift was smaller than in the first week, but it was still significantly greater than in the second week following the reopening of retail in June, indicating the desire of shoppers to visit bricks and mortar stores in the run up to Christmas,” said Diane Wehrle, marketing and insights director at Springboard.
However, Diane said that footfall still remains “substantially” below the 2019 level – and after the festive season comes to an end there are worries that retailers could struggle.
“Any government initiative that will help the beleaguered high streets in Scotland (and elsewhere) will be gratefully received. If vouchers are introduced in Scotland some people will use them to help them buy necessities and therefore food retailers will benefit. Other people will take the opportunity to use them for a little luxury in which case independent specialist food stores and delis will benefit,” explains Dan Whytock, CEO of the online marketplace Down Your High Street.
“There will no doubt be teething problems with a scheme such as this, there usually are. It will be very interesting to see how the scheme works in Northern Ireland,” he continued.
The Scottish Retail Consortium’s director David Lonsdale said the voucher scheme could give a “shot in the arm” to retailers. “Pandemic-induced restrictions and economic downturn are weighing on consumer demand, and a high street voucher scheme could help get the economy moving again and give a much needed shot in the arm to shops and other consumer-facing firms like eateries in the leaner months early in the New Year,” he said.
Extending the scheme to foodservice businesses will be important, says Edward Berry of the independent food retail consultancy The Flying Fork, as many local food retailers have already seen a welcome boost to their businesses throughout the pandemic.
“It’s a curious position,” Edward said. “We have seen a massive effect on non food retailing – possibly mainly big names with big overheads – and probably even worse, the devastation to catering in all its models: pubs, restaurants, cafés etc. My question is whether it’s the food retailers that need the help with vouchers.”
Indeed, the hospitality industry has been one of the hardest hit by Covid-19. Many independent cafés, restaurants and pubs have had to close their doors over lockdown, which has had a knock-on effect on the wider food and drink sector, with food producers, such as cheesemakers, seeing their route to market vanish overnight.
Vouchers were floated as a potential way to reboot the economy over the summer, too, with the think tank Resolution Foundation saying that giving all adults £500 in gift cards could help the retail and hospitality sectors through the pandemic.
“A universal ‘High Street Voucher’ scheme – worth £500 per adult and £250 per child – to be spent only in these sectors would kickstart demand in the right parts of our economy, boost living standards and deliver targeted support to the businesses that need help the most,” said James Smith, research director at the Resolution Foundation.
While it remains to be seen whether a high street voucher scheme will take shape in Scotland, Wales or England in the new year, fine food retailers can still use gift cards in their shops as a way to generate sales when stock issues abound.
“The benefits of vouchers are many: it’s a non-perishable gift (but do include an expiry date), a reason for new people to visit your shop, and positive cash-flow,” cheese expert Justin Tunstall explained in a recent column for Speciality Food. “This year, it’s also a way for shielding or queue-averse shoppers to buy gifts without coming into town.” At a time when many independent food retailers are facing a Christmas shopping frenzy, it could prove to be a profitable venture.
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