A survey by the British Retail Consortium suggests store bosses plan to respond to the jump in employment costs by cutting hours and staff numbers, despite a 250,000 job losses in the last five years
More than four in 10 shops plan to axe staff – on top of 250,000 high street jobs lost in the past five years, industry research suggests.
The survey of store bosses by trade body the British Retail Consortium also warned hours were likely to be cut and hirings frozen in the face of rising employment costs. The gloomy outlook has been blamed, in part, on an increase in employers’ national insurance costs announced in the late 2024 Budget and which applied from April last year.
It coincided with another rise in the national living wage for millions of low paid workers. The BRC questioned chief financial officers and finance directors in the retail sector. More than two-thirds (69%) described themselves as pessimistic or very pessimistic, up from 56% in July last year.
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Just 14% said they were optimistic. When asked about their worries for the year ahead, 84% ranked labour and employment costs in their top three concerns, up dramatically from just 21% last July. More than half those asked – 61% – said their firm planned to reduce the number of hours offered, or overtime, of staff, and 45% would need to “freeze recruitment”.
Jobs are also likely at risk, with 55% planning to reduce head office workers and 42% to cut store staff numbers. The BRC pointed out that retail is the country’s biggest private sector employer, yet has shed 74,000 jobs in the past year and more than 250,000 over the past five. The body warns the way the Employment Rights Act is implemented could prove crucial.
The threat of more job cuts in the sector comes after a number of big name chains has collapsed recently, including shoe shop chain Russell & Bromley, and fashion firm Quiz. Helen Dickinson, BRC chief executive, said: “The economy is expected to remain fragile, with weak wage growth, unemployment rising, and low consumer confidence, all pointing towards falling demand.
“At the same time, businesses face sharply higher costs, from rising input prices and wage bills to new burdens created by government policy. We all want more high-quality, well-paid jobs. But retail has already lost 250,000 roles in the past five years, and youth unemployment is climbing fast.
“The Employment Rights Act is the biggest shake-up of employment rules in a generation, and how it is delivered will make or break job opportunities. “Done well, the reforms can raise standards while supporting flexible and entry-level roles that are vital for people whose lives don’t fit a fixed 9-5 pattern.
“If the Government fails to consider business needs on policies including guaranteed hours and union rights, they will add complexity and reduce flexibility, ultimately stripping away entry-level and part-time opportunities at precisely the moment the country needs them most.”
