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900,000 jobs at risk

Retail 2025: higher skills and pay, but fewer staff

Shop going online

Online sign of the times – shop in Lothian Road, Edinburgh

Shop workers will be more highly skilled and better paid in the future, but there will be fewer of them, according to new analysis.

The rate of change within the retail workforce is set to quicken as the digital revolution reshapes the industry, more property leases come up for renewal and the cost of labour goes up, while the cost of technology goes down.

This could result in 900,000 fewer jobs in retail by 2025, but those that remain will be more productive and higher earning.

The findings are contained in a new report, published today by the British Retail Consortium, which sets out how the retail workplace landscape is expected to change in the coming years.

It also suggests that store closures on UK high streets and town centres could exacerbate the impact on employment in already fragile communities with weaker regions and the most vulnerable low paid staff most at risk.

The report is based on detailed research and modelling across the industry, involving the most senior executives in retail businesses, and considers the implications for jobs in the industry, the profile and aspirations of the workforce to 2020 and beyond.

It finds that areas that are already economically fragile are likely to see the greatest impact of store closures and some of the people affected by changing roles will be those who may find it hardest to find other jobs.

Smaller businesses are also likely to be disproportionately affected by the ongoing evolution of the industry, as they generally have fewer ways in which to respond to rising costs.

The BRC calls for the government to:

  • Rebalance the burden of taxation, by fundamentally reforming the business rates system
  • Ensure the remit of the Low Pay Commission is strengthened and clarified with regard to the National Living Wage
  • Greater employer leadership of the apprenticeship levy including more discretion for employers over how and where it is spent

Helen Dickinson

BRC chief executive, Helen Dickinson (above), said: “The key conclusions of today’s report are not surprising – there will be a further contraction in retail space and a reduction in the number of people employed in retail.

“Individual retailers will find their own paths to 2020 and beyond but from an industry perspective, we hope to see technology and competition resulting in better experiences for the customer and better jobs for those working in retail.

“We would like to work with government to manage the impact of the changes on the most vulnerable.” 

David Lonsdale (right), director of the Scottish Retail Consortium, added: “Scotland’s retail industry is undergoing seismic change which is driven by changes in shopping habits, new technology, stiff competition, falling prices and burgeoning regulatory costs.

David Lonsdale 2“Many in the industry are responding by refining their business models, investing in new technology and revamping their logistics capabilities.

“What’s clear from this report is that jobs in retail will in future be higher skilled, more productive and better paid, but that there will be fewer of them. That process appears to be already underway with official data showing a drop of 3,500 retail jobs in Scotland over the past year. The number of stores in Scotland is also forecast to drop further.

“These changes will have profound implications too for devolved public policy, particularly for employment prospects in communities more reliant on retail jobs, for our town centres and for future revenues from taxes such as business rates.

“The cumulative burden of government-imposed tax and regulatory costs has mushroomed and is accelerating the pace of change affecting retail. This reinforces the need for a far more coherent approach to policy making, where business and government as a whole in Scotland work together to deliver a joint retail industry strategy which nurtures the sector and helps it fulfil its potential over the decade ahead. This would benefit retail, its supply chain and the other sectors it touches.”

Chairman of the BRC and John Lewis Partnership, Sir Charlie Mayfield, said: “What matters is who and where will be affected most by all this change. These are the valleys to cross and the path through them needs to be chartered with care.

“The report reaches some positive conclusions. Customers will get better choice, better value, more convenience and more personalisation. Retailing will be more productive, powered by better jobs that offer the chance to develop a wide array of skills and greater earnings. Not because of the National Living Wage, but because differentiation between competing retailers will depend on it.”

 

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