UK retailers are planning to cut staff hours and jobs amid rising employment costs and pessimism over the economy.
Nearly two-thirds (61%) of finance bosses at retail companies say they plan to cut working hours or reduce overtime, according to the latest survey by the British Retail Consortium (BRC), the trade body representing most of the big retailers. More than half (55%) said they would eliminate head office jobs and 42% said they would cut jobs in stores.
Job cuts for young people, particularly affected by the low availability of entry-level jobs in retail and hospitality, are likely to increase pressure for political action.
The retail sector shed 74,000 jobs last year due to new technology, from AI marketing and stock management tools to automated tills.
Retailers say they plan to implement more technology and other productivity strategies to reduce labor needs, after employment costs rise by £5bn in 2025, according to the BRC, thanks to employer National Insurance contributions and a higher legal minimum wage.
Retail stores are also under pressure from discount prices from online competitors such as Sheen, Vinted and Temu, as well as weak demand, as households manage higher energy and food bills and try to save more amid employment problems and an uncertain geopolitical environment.
A BRC survey found 69% of retail finance executives were “pessimistic” or “very pessimistic”, up from 56% in July last year. Only 14% were “optimistic” – though up from 11% in July.
Helen Dickinson, chief executive of the BRC, said: “We all want more high-quality, well-paid jobs. But retail has already lost 250,000 roles in the last five years and youth unemployment is rising fast.”
She said 84% of finance bosses ranked labor costs in 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 of which point to falling demand. At the same time, businesses face much higher 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 will gradually introduce new protections for workers starting in April, will “make or break job opportunities” over the next few years.
“Ideally, the reforms will raise standards, supporting flexible and entry-level roles that are vital to the lives of people who don’t fit into the static nine-to-five model. If the government fails to consider business needs on policies, including guaranteed hours and union rights, they will increase complexity and reduce flexibility.
