29th February 2016
The UK’s retail sector could lose up to 900,000 jobs and face thousands of shop closures over the next 10 years a new report has warned.
The analysis from the British Retail Consortium (BRC) said that by 2014, 191,000 fewer people worked in retail, the UK’s largest private sector employer, than in 2008.
The report entitled 2020: Fewer but Better Jobs, explained that the “incidence of low pay” has been rising in retail for several years and that cost pressures have increased markedly at a time when growth in consumer expenditure has been subdued.
The BRC explained that rate of change within the workforce is now set to quicken “as the digital revolution reshapes the industry, assisted by many more leases being up for renewal and accelerated by the diverging costs of labour versus technology”.
It asserted that while the retail industry is supportive in principle of the National Living Wage, the effects on employment have been underestimated.
From April the National Living Wage will be £7.20 an hour for the over-25s, up £6.50 per hour. This is then set to rise to £9 an hour by 2020. The BRC said the cost to the industry could be £3bn.
“Together these effects could mean there are as many as 900,000 fewer jobs in retail by 2025 but those that remain will be more productive and higher earning,” it said.
The BRC expects that the impact will be uneven across the country where areas that are already economically fragile are likely to be hit worst.
It warned that some of the people affected by changing roles will be those who may find it hardest to transition into new jobs which are created.
The organisation however urged that retailers would like to work with government both to ensure the successful implementation of policy and to mitigate the impact of the changes it expects to see in places and on people who may be most vulnerable.
There are three areas where this should happen. It said: “The first is to rebalance the burden of taxation. Second is to ensure the remit of the Low Pay Commission is strengthened and clarified with regard to the National Living Wage.
“Thirdly, there must be greater employer leadership of the apprenticeship levy including more discretion for employers over how and where it is spent.”