Grant scheme hoped to lower costs of goods in rural shops

Rural shops such as in Bigton could benefit.

Rural shops will be able to claim up to £10,000 to help find new ways of working aimed at reducing costs for shoppers.

The SIC’s development committee on Wednesday approved the creation of a rural retail services scheme, which is intended to improve their sustainability and competitiveness.

It will be available to any “non-specialist retailer” outside Lerwick, providing basic groceries and household goods.

A report to members highlighted rural shops’ “vital function” which it said had been particularly evident during the pandemic and last winter’s adverse weather when they have served as “community hubs”.

But due to high costs of transportation, energy and maintenance, combined with low footfall, they are said to be facing difficulties financing the necessary works to improve their sustainability.

The grants will be provided to cover up to 50 per cent of the costs of eligible projects, such as improving energy efficiency to reduce bills.

Shops in Scalloway and Brae will only be able to cover 25 per cent of the costs – a point which was queried by Shetland Central member Davie Sandison.

Business development team leader Neil Henderson explained the scheme was targeted at the most remote areas, where shops were more “fragile”.

Mr Henderson said 26 businesses had been identified as potentially benefitting from the scheme.

He said the funding risked being “diluted” if the scheme was broadened any further, such as to include Lerwick.

Development chairman Dennis Leask said it was hoped such measures could lead to prices of goods becoming “equitable” compared with those available to shoppers in Lerwick.

Shetland West member Liz Peterson said she was “very supportive” of the scheme.

“I feel the rural shops in rural areas need to to ensure their business are sustainable,” she added.

“It costs shops in rural areas a lot more just to provide the same services as shops in Lerwick, Scalloway or Brae.

“The more rural a shop is the less footfall there is.

“So they have very tight profit lines that they are trying to maintain.”

Ms Peterson said the extreme weather last winter showed just how much shops were needed in rural areas – particularly for older folk.

Council leader Emma Macdonald said rural businesses were facing “significant pressures” and paid particular tribute to her local shop in Voe, which she said had gone “above and beyond” to serve the community.

Lerwick North and Bressay member Stephen Leask said rural shops had been a “lifeline” during the pandemic.

The scheme will be funded with £182,000 taken from Shetland’s £1.8 million allocation of the UK government’s shared prosperity fund.

Eligible projects highlighted in the report include upgrading or expanding premises, refitting to increase capacity and installing low energy options including solar panels or small wind turbines.

The scheme will close to applications as soon as all funds are committed, or by the end of next year, whichever comes first.