Britain could lose 900,000 retail jobs by 2025

The British Retail Consortium has made a timely plea about the impact of the National Living Wage and apprenticeship levy.

by Rebecca Smith
Last Updated: 01 Apr 2016

As the 16 March Budget draws closer, businesses and their trade bodies are taking the opportunity to air some well-timed grumbles. Last week was the turn of lobby group Oil & Gas UK, warning of an industry ‘at the edge of a chasm’. Now the baton’s been passed to the British Retail Consortium (BRC), to have a go at providing an even graver outlook for Britain's retailers.

Its new report suggests the sector could lose up to 900,000 jobs in the next decade and of the 270,000 shops in the UK today, up to 74,000 could shut. So what's at fault for the steep drop? According to the BRC, rising costs due to the incoming National Living Wage and new apprenticeship levy could significantly speed up job cuts.

That’s a very different picture posed from the Office for Budget responsibility's estimate, which predicts the new minimum wage will cost around 60,000 jobs by 2020. Part of the problem in compiling an accurate prediction is that economists have been torn over the extent to which these changes will impact the UK’s labour market.

George Osborne thinks his two big policies from last March’s Budget will help tackle productivity and weak pay growth problems, as employers should be motivated to improve training for their low-skilled staff to make them worth the higher pay. 

On the flip side, under pressure retailers might respond to these higher wage costs simply by using fewer workers, so productivity would rise but so too would unemployment. When the policies were announced, the retail sector was immediately flagged as one particularly vulnerable to the changes. And as retailers employ one in six British workers, equating to around three million people, so there are concerns for the wider economy.

Of course businesses in the retail sector may find it easy to blame the government and its lack of urgency regarding business rates, but more dangerous threats arguably come from the rise of automation and ecommerce. There will be some jobs created in call centres, delivery networks and tech operations to combat some of those lost to self-checkouts and online shopping, but it's unlikely to balance out. 

The BRC’s aim is to get its sector’s voice heard above the rest clamouring for attention in next month’s Budget. But regardless of whether it’s 60,000 jobs or 900,000, there’s general agreement that small firms and poorer areas will find it more difficult to adapt. That's unlikely to do much for the government's claim to be the entrepreneurs’ party, should it ignore these concerns on 16 March.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events