• Nearly one million retail jobs to go by 2025, warns BRC

  • 29 Feb 2016
  • Comments 3 comments

National living wage and apprenticeship levy could ‘fail at implementation’

Up to 900,000 jobs in the retail sector are expected to go in the next 10 years as employers deal with the digital revolution, shop closures, and rising tax and wage bills, a report has warned.

The British Retail Consortium (BRC) said that the UK’s largest private sector employer is set to undergo an unprecedented period of change, with the national living wage (NLW) and the apprenticeship levy likely to have a significant impact on jobs in the sector.

The study suggests that “economically fragile” regions in the UK will be hit the hardest, with the brunt of the job losses felt in the north of England, the Midlands, and Wales, further strengthening the UK’s economic north/south divide.  

BRC suggests by the time the NLW reaches £9 an hour from 2020, it will cost the industry up to £3bn per annum. And while the apprenticeship levy is intended to encourage greater investment in the workforce, the report said: “Both [policies] have sound intentions but both could fail on implementation.”

The report, based on research and modeling across the industry, with insight from senior executives in retail businesses, suggests that although the workforce could contract by a third by 2025, the remaining jobs will be more productive and rewarding.

Mark Beatson, CIPD chief economist, said it was unclear whether these predictions for the sector would pan out.

A spokesman from the Treasury said: "We are already seeing record employment rates and more people in employment than ever before.

"And taking into account the national living wage, the independent Office of Budget Responsibility expects employment to rise by a further 1.1 million by 2020."

Beatson added: “More capital doesn’t necessarily mean better job quality and professionalisation. And if employers fail to consider the people element up front when adjusting their business models, customers will see thousands of people lose out, and businesses employer brand will suffer.

“This is a crucial moment for HR in the sector to be involved with the strategic conversations from the beginning. A consolidation of retail space could be as easy as retraining the workforce to work in a more digitalised function,” he said.

Jane Pritchard, enterprise and culture director of the BITC’s Healthy High Streets campaign, said staff and employers were already adapting to the changing labour market and finding other reasons, other than retail, to come to the high street.

“In the 67 places we operate in, more than 3,500 jobs have been created over the last two years, the majority of which are not in retail,” she said. “We’ve seen a rise in pop-up shops, SMEs, and other businesses making the most of the changing working environment.”

Patrick Callaghan, parliamentary and campaigns manager at BRC, said: “Throughout this process the nature of jobs in the industry will change. Employers will require their workers to have new and different skills and that there will be a greater need for creative, service and analytical roles. In turn this will mean greater productivity and increased rates of pay; providing added motivation to improve the overall quality of the jobs in retail.

“To achieve this, employers will need to have more control over funding to help employees attain higher skills and higher pay. They will also need to work closely with government both to ensure the successful implementation of policies like the living wage and apprenticeship levy as well as to mitigate the impact of these changes,” he added.

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Comments (3)
  • Online retailers do pose a serious threat to Retailers. Either Retailers have to raise their game or loose business online. The best could be, have a e-version of their retail venture to just beat the heat. Rest, it is true, more jobs will be cut-off in reatil with automation and can effect the jobseekers a long way.

  • What "industry spokespeople" from the dawn of time keep forgetting is increased pay equals increased surplus cash after bills etc. have been paid. This leads to increased spending. Where people choose to spend this extra money depends on how attractive each retailer makes their product/shopping environment for potential customers. See Christopher's comments below.

  • Yet another Chicken Licken 'Sky falling in' warning from 'Industry sources'. Retailing is dying not as a result of paying people a living wage (and hence reducing the burden on the tax payer) but of poor service.

    Why do so many people shop online? so they don't have to stand in queues with 2 out of 8 tills open, or put up with constant pestering to buy extended warranties.

    Retailers need to sort that out if they want to stop the continual loss of customers to online retailers