Fifth of UK High Street Retailers Aim To Cut Staff In Next Three Months

Fifth of UK High Street Retailers Aim To Cut Staff In Next Three Months

Online shopping and rising costs have changed the way retail works, says trade body

Nearly a fifth of British retailers are planning to cut the number of people they employ in the next three months as the high street continues to suffer from rising costs and a shift to buying online. The number of people employed in the retail sector, the UK's biggest employer, has already dropped nearly 3% in the past three months, according to the latest figures from the British Retail Consortium (BRC). Redundancies rose to three times the level this time last year.

Helen Dickinson, the trade body's chief executive, said: "Retailers are continuing to reduce labour requirements to support a reinvention in how retail and shopping works." Retailers remain wary about the future despite a boost to trade for many from the heatwave and England's unexpected run of success in the World Cup.

The Confederation of British Industry (CBI) reported a second strong month in which 32% of retailers said sales were up, while 12% said they were down giving a positive balance of 20%, the second highest reading so far in 2018 for the employer organisation's monthly distributive trades survey.

Of the 50 retailers who took part, 8% more expected to cut their orders than those that expected to source more in the month ahead as the majority expect sales growth to flatten off in August.

Alpesh Paleja, CBI's principal economist, said: "While the heatwave has boosted retail sales in recent months, we may be seeing some early signs of a cooling off.

"Indeed, the long-term challenges facing the retail sector are significant. Continually subdued real wage growth means that households are still feeling the pinch, and retailers are still grappling with deeper structural issues, such as digital disruption."

Retailers also face the rising cost of sourcing goods from abroad following the fall in the value of the pound, alongside a jump in business rates and the legal minimum wage. At the same time household spending remains sluggish, not helped by weak consumer confidence as uncertainty over Brexit continues.

The switch to spending online has spurred traditional high street stalwarts including House of Fraser, New Look, Marks & Spencer and Carpetright to close dozens of shops as they try to pump money into home delivery infrastructure and IT. These closures and the collapse of weaker chains, including Maplin, Poundworld and Toys R Us, have put at least 35,000 high-street jobs at risk. The loss of jobs is seen as particularly bad news for women. The BRC says 70% of those who work in retail are female.