Future of fewer but better jobs

The retail industry faces a challenging future of job losses, but has an opportunity to improve conditions for those who remain says Helen Dickinson, Chief executive British Retail Consortium


Retail 2020: Fewer but better jobs, the first of a series of three reports, sets out to explain to a wider audience how profoundly the industry is changing and how this multifaceted transformation is likely to affect retail employees and the communities they serve across the country.

We found that the number of people working in retail has been falling and the incidence of low pay rising. This is no accident, but a function of costs rising faster than the market is growing, the investment and return on digital, and the consequence of three years of falling shop prices due to intense competition.

The rate of change is now set to quicken as the digital revolution reshapes the industry, many more leases come up for renewal than we have seen over the last few years and the costs of labour versus technology diverge.

We also found that this acceleration will be compounded by recent policy announcements, in particular the national living wage and the introduction of the apprenticeship levy, by markedly increasing cost-pressures at a time when growth in consumer expenditure remains subdued.

Together these effects could mean the number of people employed in retail could fall by up to 900,000 in a decade.

Increased productivity

There is an upside. Those jobs that remain will be more productive and higher earning as retailers develop better propositions and compete harder across an increasing range of business models from modern multichannel formats through to discounters and online businesses.

But what really mattered in our analysis was not the quantum of jobs, but who and where will be affected most by all this change. We now know that the effects will be uneven across the country, and in how they impact on different sizes of business and groups of people within the industry.

Smaller businesses will find it harder than larger ones. And areas that are already economically fragile are likely to see the greatest impact of store closures, with many of the people affected by changing roles those who may find it hardest to transition into new jobs created.

Over the next few years, retailers will work both individually and collectively to improve productivity and the customer offer. But in order to minimise the impact of the changes we expect to see in places and on people who may be most vulnerable and to realise the ambition of fewer but better jobs, we also need to work in collaboration with government.

There are three areas where this should happen. The first is to rebalance the burden of taxation. The changes to the business rates system announced by the chancellor last month were welcome, but do not go far or fast enough.

Second is to ensure the remit of the Low Pay Commission is strengthened and clarified to ensure their independence for their recommendations regarding future changes to the national living wage.

Thirdly, there must be greater employer involvement in the apprenticeship levy, including much more discretion for employers over how and where it is spent.

Getting this collective response right will have a hugely positive impact on the retail industry, but also on the wider economy, social mobility, geographical balance, training and employment more broadly.

More reports

Our second report, Retail 2020: What our people think, published on May 11, included the detailed findings from the survey of the lower paid working in retail as these are the people most vulnerable to the changes ahead.

Our detailed surveying showed that those people responsible for the care of children and others are less inclined or able to take jobs with more travel or hours that don’t work for them. Where then do they look for alternative employment?

The third report, Retail 2020: Solutions, will then describe how the industry plans to tackle these challenges and opportunities.