Retail sheds 225,000 jobs in five years with increasing costs of hiring impacting sector

The UK retail industry has slashed 225,000 jobs over the last five years – down to 2.8 million in September 2024 – according to the latest figures from the Office for National Statistics (ONS).

While September is traditionally the low point of the year, before the numbers rise again ahead of the peak Christmas period, on a four-quarter average there were 40,000 fewer jobs than last year.

Helen Dickinson, CEO of the British Retail Consortium, said: "Despite a further fall in the number of retail jobs, the industry remains the largest private sector employer providing approximately 2.9 million jobs in the UK, with another 2.7 million in the supply chain.

"The current fall is partially explained by ongoing transformation in the industry, from increased investment in automation and higher productivity to a shift to outsourcing of warehousing and logistics that are not all captured by the ONS retail figures.

"Meanwhile, costs of hiring have risen significantly in recent years. Pay growth in the industry was well above the national average at 8.5% in 2024, and up over 25% since 2021.

"The October Budget increases the National Living Wage by a further 6.7%, adding over £2.7 billion to retailer wage bills from April 2025, while changes to rate and threshold for employer NI contributions will cost the industry over £2.3 billion. This will could hasten the reduction in retail jobs and particularly the recruitment of part-time roles, which have been falling in recent years.

"Retailers are responding to the changing business landscape, with most saying they will further increase investment in automation and improve worker productivity. 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."

In Northern Ireland, 7,000 jobs have been lost in the retail industry in the last five years. Neil Johnston, Director of the Northern Ireland Retail Consortium, said: "139,000 people work in retail in Northern Ireland, according to the latest ONS jobs figures. However, this is 7,000 less than five years ago. Given the context that there are record numbers employed overall in Northern Ireland, it begs the question: why is the retail environment so challenging?

"The numbers employed in Northern Ireland overall are up 9,000 in the past year, but in retail in the past year numbers have flatlined. Retail is extremely challenging at present - shopping trends are changing, footfall is continuing to fall, and sales are at best flat. Profit margins are also notoriously small.

"Recent years have seen additional supply chain and statutory costs imposed on all employers including retailers, but the environment in retail has been so challenging that this has led to this marked decline in staff numbers.

"Retailing remains a significant employer – employing almost one in six people in Northern Ireland with many more in the supply chain. It is also an important part of the local economy, however, the proposed increases in employers’ National Insurance and expensive regulations for tackling waste seem certain to guarantee that life will remain tough for retailers in 2025."