Retail leaders are warning of a massive new wave of redundancies, claiming one in 10 part-time retail jobs could be on the chopping block due to extra employment costs and regulation.
The BRC today estimated up to 160,000 jobs were at risk, blaming budget measures including the rise in employers’ National Insurance payments and the national living wage, which it said would add £5bn to retailers’ labour costs in 2025 alone.
The BRC said part-time shopworker roles were particularly susceptible to the axe, with retailers to be taxed for any employee earning more than £5,000, down from the current £9,100. It said it would make it significantly more expensive to hire part-time workers.
Retailers have already announced job cuts this year, including Sainsbury’s, which last month said it was axing 3,000 roles as it shuts its remaining cafés and closes patisserie and pizza counters.
Also last month, Tesco said it was cutting 400 jobs across stores and head office management, as part of an efficiency programme to “simplify” the business.
Morrisons boss Rami Baitiéh has refused to rule out further job cuts in the coming months, having axed 200 from its people team in January as part of an efficiency savings plan. Baitiéh launched an outspoken attack in January on planned tax increases, saying it left no option but to look at major cost-cutting measures.
BRC CEO Helen Dickinson said: “The industry and its supply chains account for a third of jobs in one-fifth of UK constituencies and retail plays a vital role in upskilling the workforce and boosting productivity growth, currently spending £4bn a year on training.
“Retail has long offered the first rung of the career ladder to hundreds of thousands of young people, playing a vital role in communities up and down the country.
“However, between rising employer National Insurance contributions, higher national living wage costs, and incoming employment regulations, the government may be kicking away the ladder for the next generation. One in 10 part-time retail roles are now at risk of being lost.”
The warning over further job cuts comes with the BRC launching its 2025 Manifesto for Retail, which calls for the government to bring in new measures to invest in the sector and encourage employment. It also calls for ministers to shelve regulation which is set to heap more costs on the industry. The BRC wants both the launch of extended producer responsibility (EPR) and the deposit return scheme (DRS) to be delayed, saying they will add nearly £4bn a year in costs.
It warns the wave of red tape will inevitably contribute to further inflation, amid concerns that food prices will spark another cost of living crisis.
“Retailers face a mountain of costs from the budget and while they continue to absorb costs where they can, higher prices and job losses are inevitable,” added Dickinson.
“If the government can find ways of mitigating the £7bn of costs facing the industry this year, as well as ensuring a pragmatic approach to the Employment Rights Bill that focuses on tackling unscrupulous employers, protecting employees while supporting employment, then many jobs would be saved.”
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