High Streets Initiative · 28 July 2017

Decline in retail jobs driven by automation and rising employment costs

A young woman in front of her clothing boutiquehttp://195.154.178.81/DATA/i_collage/pu/shoots/791298.jpg
Almost seven in ten retail owners said they planned to reduce employment levels in the next three months

Full-time employment in Britain’s retail sector dropped by 3.3 per cent in the last 12 months, according to new research, as experts attribute rising hiring costs and technological advancements to a decline in retail jobs.

Figures from the British Retail Consortium’s (BRC) employment monitor showed a drop in retail employment in each month of the second quarter of 2017, with the steepest fall in April.

Survey responses also revealed that 69 per cent of retail owners gave a reduction in hours in both full time and part time retail jobs in those three months.

In the same period in 2016, zero per cent of respondents were intending to decrease employment levels in the following quarter. The latest results showed that 15 per cent of retail owners planned to cut hours or jobs in the upcoming third quarter.

Commenting on the findings, Helen Dickinson, BRC chief executive, cited increased automation and greater employment costs – through the National Living Wage and the Apprenticeship Levy – as “driving the industry towards fewer but more productive jobs”.

“The transformation of the industry is still in progress and this quarters’ data show that more retailers are intending to reduce their workforce in the coming months than at the same point last year,” she said in a statement.

“As ever, there are some retailers who are thriving and growing their workforce, although they are in the minority. [Some] 69 per cent of respondents to our survey saw employees work fewer hours in Q2 this year, compared to last, with reductions particularly acute amongst non-food retailers.”

Falling retail jobs was also attributed to limited consumer spending power.

Dickinson added: “With consumers seeing inflation squeezing their spending power, the challenges facing retailers will only increase in coming months; reinforcing the pressure on retailers to rethink and restructure their workforce.”

Despite inflation and rising costs limiting the disposable income of British consumers, high street footfall has been boosted by strong summer weather.

Recent BRC trading figures showed footfall in June 2017 increase by 0.9 per cent on the previous year, with retail parks gaining in particular. Footfall in out of town locations grew by 2.3 per cent in June.

“The arrival of summer spurred greater shopper footfall in the majority of retail destinations in June. High streets and retail parks saw solid growth in footfall, as shoppers headed out to renew their wardrobes and purchase other seasonal items,” Dickinson said.

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Read more from the Business Advice High Streets Initiative

This article is part of a wider campaign called the High Streets Initiative, a new section of Business Advice championing independent and small retailers by identifying the issues that put Britain’s high streets under pressure. Visit our High Streets Initiative section to find out more.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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