A recent industry study suggests that over 40% of retailers are planning to lay off employees, adding to the 250,000 jobs lost on the high street in the past five years. The British Retail Consortium conducted the survey, indicating that businesses are considering reducing staff hours and halting new hires due to escalating labor costs. This negative forecast is partly attributed to the higher national insurance costs for employers introduced in the previous year’s budget.
The research, which involved CFOs and finance directors in the retail sector, revealed a significant increase in pessimism, with 69% expressing negative sentiments compared to 56% a year ago. Only 14% remained optimistic about the future. Labor and employment costs topped the list of concerns for 84% of respondents, a sharp rise from just 21% in the previous year.
Many companies are planning to cut back on hours and freeze recruitment to cope with the financial strain, with 55% considering reducing head office staff and 42% planning to decrease store employees. Despite being the largest private sector employer in the country, the retail industry has already shed 74,000 jobs in the past year and a total of over 250,000 in the last five years.
The looming threat of further job losses follows the recent collapse of prominent retail chains like Russell & Bromley and Quiz. As stated by Helen Dickinson, the CEO of the BRC, the fragile economy, weak wage growth, rising unemployment, and low consumer confidence are all factors pointing towards declining demand. Dickinson emphasized the importance of well-paid jobs and expressed concerns about the impact of government policies on businesses.
The Employment Rights Act reforms are seen as crucial in shaping future job opportunities. According to Dickinson, the success of these reforms will depend on how well they balance raising standards with supporting flexible and entry-level roles. Failure to consider business needs in policies such as guaranteed hours and union rights could lead to a reduction in job flexibility and opportunities, especially for part-time and entry-level positions.
