- UK employment in the retail sector is at just 55% of its August 2019 levels, according to the CBI. Jobs are being cut at their fastest rate since 2009 — and more pain is to come.
- Further job cuts are also expected across Europe, according to a study by McKinsey & Company.
- But visitors are gradually returning to UK high streets and shopping centres, and retail sales are starting to rebound.
- Visit Business Insider’s homepage for more stories.
UK retail jobs have been cut at the fastest rate since 2009 during the COVID-19 pandemic — and the worrying trend is set to continue in September, according to one of the country’s biggest business organizations.
The Confederation of British Industry (CBI)’s latest survey of retailers found that the employment in the retail sector has nearly halved over the past year. It sits at just 55% of its August 2019 levels — far worse than the figure in May, when employment was at 80% of 2019 levels. The CBI expects retail employment to fall further in the next quarter, dipping below 50% of 2019’s figures.
British retailer Marks & Spencer is among those that have laid off staff during the pandemic. Over the past three months, it has announced 7,000 job cuts — 10% of its total workforce. Many of the cuts fall on managerial or administrative roles.
The trend is mirrored across Europe. A study by McKinsey & Company suggests that up to 59 million jobs across Europe are at risk of a reduction in hours or pay, temporary layoffs, or permanent redundancies, and that the retail sector will be among the hardest hit.
The drop in retail employment in the UK comes despite the government’s Coronavirus Job Retention Scheme, which allows companies to temporarily lay off their staff with 80% of wages, claiming back the money from the government.
This scheme proved popular among retailers as high-street stores closed under lockdown restrictions — government stats show 73% of employers in the wholesale, retail, and motor vehicle repair sectors used the scheme for a total of 1,812,000 employees, or 40% of staff in these sectors.
Reasons for optimism
A recent increase in retail footfall has created optimism within the industry. Data firm Springboard said that footfall across the UK increased by 4.1% in the week ending 22 August, and by 6.8% in London.
And some UK retailers have been hiring: Supermarket giant Tesco announced on Monday that it would be permanently hiring 16,000 new members of staff to meet demand in online sales. It is expected that many of these jobs will be offered to temporary workers Tesco took on at the beginning of the pandemic.
In other positive news, the CBI survey of 63 retailers showed only a small decrease in overall retail sales. On average, respondents said that sales were only 27% lower than in “normal” conditions, compared to 79% lower in June.
However, the number of shoppers is still significantly below pre-lockdown levels, with 61.2% fewer visitors to central London high streets than this time in 2019. Footfall in retail parks has seen the largest rise, according to Springboard, with these sites now reaching 89.4% of last year’s mid-August visitor numbers.
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