Kindness will help as firms in the Highlands face 'brutal' challenge in 2023 amid cost of living crisis, says business leader
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Highland business leaders are hoping 2023 will provide a boost for the local economy – but it is likely to be a tough start with the ongoing cost-of-living crisis.
Last year proved to be a harsh financially for many businesses with the rising cost of most commodities, especially energy, following Russia’s invasion of Ukraine.
There are potential bright spots though with the prospect of a positive response to the Opportunity Cromarty Firth green freeport bid seen as a game-changer for the local economy. However a number of factors, such as the imminent closure of the Ironworks, Highland Council moving out of the town house and the future for Eden Court – given its redundancies and shorter hours – could have less than positive impact for the city economy in the coming 12 months.
Jo de Sylva, chairwoman of Visit Inverness Loch Ness, said that, while a successful freeport bid would be great for Inverness and the surrounding area, it would be a while until the economic benefits were felt directly.
On the Ironworks going, she added: “I do fear for the future of live gigs such as those who were the perfect size for the Ironworks as there is not much option left in town.”
She continued: “The first three months will be tough for businesses in the Highlands but we know that tourism numbers are looking exceptionally good for 2023.
“During the first quarter of the year it’s important we support one another because it’s going to be brutal. A little kindness to one another goes a long way.”
Willie Cameron, business development director of the Cobbs Group which runs hotels, a bakery and other businesses, said: “The general consensus, regarding tourism in 2023, is very encouraging with forward booking looking very healthy both from hotels/bed and breakfast and self-catering.
“The value of the pound against the dollar is attractive for US visitors coming to Scotland and getting better value.
“The price of food and drink in the supply chain is increasing dramatically and this, although regrettable, has to be passed on to the consumer.”
Other developments that are likely to make progress this year include the food zones in the Victorian Market and Eastgate Shopping Centre, as well as retail sites within Union Court in Union Street. It will also be interesting to see what happens with the vacant Debenhams site with the shopping centre.
Donald Begg, director and owner of Begg Shoes which has stores in Inverness, said big things were happening in retail.
“We are excited for 2023, which looks to be a year of reinvention in the city centre,” he said. “Key city centre construction projects have been quietly completed, ready for 2023.
“Exciting new venues such as the Victorian Market redevelopment or the local food court in the Eastgate centre are expected to flourish, with a host of new vendors for visitors to enjoy.
“Bigger projects such as the freeport bids may set the bedrock for longer-term economic success and key announcements may boost confidence for those investing and working in the area.”
He said the trend towards online shopping would continue to slow as customers rediscovered the charms of local shops and hospitality.
“Begg Shoes has established a successful online business but our real strength lies in the fantastic customer experience we offer in-store,” he added. “We expect more visitors and tourists than ever in 2023 and are very optimistic for the year ahead – getting back to what we do best.”
David Richardson, the Highlands and Islands development manager with the Federation of Small Businesses, said 2022 had proved to be a year of economic turmoil, adding: “But while many in and around Inverness may be down, they are certainly not out.”
He wants the Scottish Government to introduce targeted rates relief for small businesses.
“We also want governments at all levels to work more closely with smaller businesses, and to take more care over the introduction of regulations and their implementation,” he said.
Jackie Cuddy, the manager of Eastgate Shopping Centre, said recent footfall numbers were much closer to 2019 figures – ranging from 15 to 19 per cent down on pre-pandemic levels.
She added: “That said, many retailers are experiencing sales figures very close to, if not on a par with, 2019. So it seems that despite the cost-of-living crisis, people were determined to have a good Christmas or, indeed because of it, they want a lift.
“The danger here is that in the first quarter of the year people will probably tighten their belts even more, particularly as bills start to come in.”
Mrs Cuddy felt that, in the long term, retail would continue to stabilise but “we are not out of the water yet”.
“Increased utility costs and difficulties in recruitment will continue to affect retailers and I am sure we will see more casualties in the first quarter,” she said.
Eastgate’s new food collective – Loch & Larder – will open in early 2023 and she said: “We feel this will enhance and stabilise the offer at Eastgate.
“We also have a new national signed up to open in March, Rituals. Early discussions with various parties continue for the Debenhams space.”
