UK retailers are planning to cut staff hours and jobs amid rising employment costs and pessimism about the economy.
More than half (52%) of finance bosses at retail companies said they planned to reduce working hours or cut overtime, according to the latest survey by the British Retail Consortium (BRC), the trade body representing most large retailers. Almost half (48%) said they would cut head office jobs and 32% said they would cut jobs in stores.
Potential job cuts are likely to increase pressure for political action at work for young people who are particularly affected by the reduced availability of entry-level jobs in the retail and hospitality sector.
The retail sector has shed 74,000 jobs in the last year due to new technology ranging from AI marketing and stock management tools to automated tills.
Retailers said they planned to implement more technology and other productivity strategies to reduce labor requirements after employment costs are expected to rise by £5 billion in 2025, according to the BRC, as a result of increased employer National Insurance contributions and a higher legal minimum wage.
Retail stores are also under pressure from online competitors like Shein, Vinted and Teemu to cut prices, as well as a lack of demand, as households manage higher energy and food bills and try to save more amid employment concerns and an uncertain geopolitical environment.
The BRC survey found that 69% of retail finance bosses were “pessimistic” or “very pessimistic” about the outlook, up from 56% in July last year. Only 14% were “optimistic” – although this was up from 11% in July.
Helen Dickinson, chief executive of the BRC, said: “We all want more high-quality, well-paid jobs. But 250,000 roles have already been lost in retail over the past five years and youth unemployment is rising rapidly.”
He said 84% of finance bosses ranked labor costs among their top three concerns: a huge increase from 21% in July. “The economy is expected to remain fragile, with weak wage growth, rising unemployment and low consumer confidence all pointing to falling demand. At the same time, businesses face increasingly high costs, from rising input prices and wage bills to new burdens created by government policy.”
Dickinson said the finer details of the Employment Rights Bill, which would gradually introduce new protections for workers starting in April over the next few years, “will make or break job opportunities”.
“Done well, reforms can raise standards while supporting the flexible and entry-level roles that are vital for people whose lives don’t fit into fixed nine-to-five patterns. If the government fails to consider business needs on policies, including guaranteed hours and union rights, they will add complexity and reduce flexibility, ultimately taking away entry-level and part-time opportunities exactly when the country needs them most.”
