Thousands of jobs are at risk across Scotland as quarter of shops face closure
The Scottish Retail Consortium (SRC) study says the country is more exposed to the consequences of industry change than the UK as a whole, and is at greater risk of "deleterious outcomes".
A "potentially lethal cocktail" of business rates and high employment costs is restricting the ability of retailers to invest in the technology and skills of the future, the report said.
The SRC is calling for urgent action, including reforming the business rates system to be simpler, more flexible and more competitive, and lowering retailers' overall tax burden.
This is yet more evidence of the SNP's business rates fiasco unravelling
Andrew Murphy, SRC chairman, said: "Government faces a stark choice. They can create a positive business environment promoting the conditions for constructive investment and creation of quality jobs, or they can continue on the current path of largely ignoring the systemic problems and allowneeds.
"Such an approach will curtail investment in stores and result in fewer jobs, hollowed-out town centres, and lower tax revenues.
"This paper sets out the case for a positive economic strategy in Scotland."
There are 252,000 people working in retail, making it Scotland's largest private sector employer.
The SRC report suggests a range of measures to respond to the challenges, including developing an industry strategy to ensure Government policy engages with the reality of modern retail It also called for work to ensure retailers continue to benefit from free-trade arrangements with the rest of the EU as well as the UK single market, describing the latter as "hugely valuable".
Meanwhile, businesses seeking to appeal against increased new business rates will be forced to wait an extra month before their appeals are considered.
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There are 252,000 people working in retail in Scotland
Firms must now wait at least 105 days before a decision is made on their business rates bill – up from the previous limit of 70 days.
Scottish Conservative shadow finance secretary Murdo Fraser said: "This is yet more evidence of the SNP's business rates fiasco unravelling.
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"Not only was the cap announced by Derek Mackay found to be misleading, but now firms are being forced to wait more than a month extra to get their appeals heard."
Jobs minister Jamie Hepburn said: "The Scottish Government is doing everything within our powers to support our economy."