Retail jobs in the UK are under pressure because the cost of employing people is rising fast. A survey by the British Retail Consortium (BRC) reportedly shows that finance leaders in retail are increasingly worried about labour costs, especially since the Employment Rights Act came into force in January.
Confidence among retail finance officers has dropped sharply. Nearly 70 per cent now feel pessimistic about the year ahead, compared with 56 per cent last summer. Only 14 per cent feel optimistic. Many expect the 2025 Budget to make investment harder. Labour costs are the biggest concern, with 84 per cent ranking them in their top three worries, up from just 21 per cent last year. Other risks include weak consumer demand, higher input costs, and heavier taxes and regulations.
Employment costs rose by £5 billion in 2025 due to higher National Insurance contributions and increases in the National Living Wage. Hiring a full-time entry-level worker now costs 10 per cent more, while part-time costs are up 13 per cent. Youth unemployment has also climbed to 15.9 per cent, leaving 7,30,000 under-24s without work.
To cope, many retailers plan to cut staff hours, freeze recruitment, or reduce headcount in stores and head offices. At the same time, they hope to boost productivity and invest more in automation.
Retail is the UK’s largest private-sector employer, but it has already lost 74,000 jobs in the past year and 2,50,000 over the past five. The new Employment
Rights Act could add further costs and reduce flexibility, especially around guaranteed hours. Retailers warn this may limit entry-level and part-time opportunities, just when they are most needed.
Reforms must balance higher standards with business needs, or risk worsening job losses, says the survey report.
