The British Retail Consortium has warned that Labour’s £40bn budget will put further pressure on employers to cut jobs and hours, after the latest ONS figures revealed the total number of people employed in the retail sector has fallen by more than a fifth over the past five years.
There were 2.81 million people employed in retail stores, as well as a further 2.7 million in the wider supply chain as of September 2024, according to the latest quarterly jobs report. It’s a fall of approximately 40,000 jobs compared to the same time last year, and 225,000 fewer than the same time in 2019.
Part of the fall can be attributed to an “ongoing transformation” across the industry, including an increased investment in automation and measures at improving productivity, said BRC chief executive Helen Dickinson.
A shift by retailers to increasingly outsource the running of logistics and warehouse networks to third parties was also not completely reflected in the data, she said.
However, the body, which represents supermarkets, independents and non-food retailers, warned costs of hiring, which have risen “significantly in recent years”, had contributed to the fall.
Increases to the national living wage and NI contributions outlined in chancellor Rachel Reeves’ maiden budget in October could further “hasten” the decline in employment, particularly part-time roles, the BRC warned.
“Pay growth in the industry was well above the national average at 8.5% in 2024, and up over 25% since 2021,” Dickinson said.
“The October budget increases the national living wage by a further 6.7%, adding over £2.7bn to retailer wage bills from April 2025, while changes to rate and threshold for employer NI contributions will cost the industry over £2.3bn.
“Retailers are responding to the changing business landscape, with most saying they will further increase investment in automation and improve worker productivity,” Dickinson added.
“It is inevitable the budget will also put pressure on jobs and hours in the coming year, potentially affecting communities all over the UK that rely on retail as a vital provider of entry-level, local jobs.”
Reeves used her maiden budget to increase the rate of employer National Insurance by 1.2 percentage points to 15% from next April. The threshold at which employers become liable to pay National Insurance on each employee’s salary was also reduced, from £9,100 per year to £5,000 per year, adding roughly £615 to the bill businesses pay per employee.
The changes have been widely criticised by businesses across the retail sector – which remains the UK’s largest employing sector – who warn the proposals will hamper growth, and could lead to price increases at a time when shoppers are still feeling the impact of the cost of living crisis.
In November, the BRC published an open letter signed by 80 of its members, including Aldi, Sainsbury’s, Asda, Booths, Holland & Barrett and Marks & Spencer, warning the combined impact of the budget proposals could add £7.1bn to the sector in costs.
It called for a delay in the implementation of packaging levies, as well as to bring forward reforms to business rates currently proposed for 2026/2027.
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