Retail jobs decline as BRC warns impact of rising employment costs

The UK had 2.81 million retail jobs in 2025, the lowest four-quarter average on record.

That was 68,000 lower than in 2024 and 383,000 lower than in 2015, according to the latest data from the ONS.

Meanwhile, the British Retail Consortium’s latest survey of retail Chief Financial Officers and Finance Directors has revealed a “sharp rise in anxiety” about labour costs over the next year.

Such concerns have shot up the agenda since the implementation of the Employment Rights Act, which became law in January, with 84% of CFOs ranking labour and employment costs in their top three concerns, up dramatically from just 21% last July.

Other significant risks include falling demand (77%), rising input costs (39%), and the growing tax and regulatory burden (29%).

The pressures are building on an already challenging backdrop, as retail employment costs rose by £5 billion in 2025 owing to increases in employer National Insurance Contributions and a higher National Living Wage.

The BRC has calculated that the cost of employing a full-time entry-level worker rose by 10%, while for a part-time worker it rose by over 13%.

As such, a majority of CFOs (52%) plan to ‘reduce the number of hours/overtime’ of staff and 32% say they will need to ‘freeze recruitment’. Jobs are likely at risk, with almost half (48%) planning to ‘reduce head office headcount’ and 32% to ‘reduce stores headcount’.

Additionally, retailers will work on making up for a smaller workforce by ‘driving higher productivity’ (68%) and ‘investment in automation’ (61%).

With weak wage growth, low consumer confidence, and rising business costs, CFO sentiment has deteriorated markedly in the past six months. More than two-thirds (69%) describe themselves as ‘pessimistic’ or ‘very pessimistic’ (up from 56% in July 25), and only 14% ‘optimistic’ (11% in July 25).

The downbeat outlook reflects unease about the 2025 Budget, which three-quarters (74%) of CFOs suggested would make it “harder to invest”.

Helen Dickinson, CEO at the BRC, said: “The economy is expected to remain fragile, with weak wage growth, unemployment rising, and low consumer confidence, all pointing towards falling demand. At the same time, businesses face sharply higher costs, from rising input prices and wage bills to new burdens created by government policy.

“We all want more high quality, well paid jobs. But retail has already lost 250,000 roles in the past five years, and youth unemployment is climbing fast (youth unemployment has risen to 15.9%, with 730,000 under-24s not able to find work).

“The Employment Rights Act is the biggest shakeup of employment rules in a generation, and how it is delivered will make or break job opportunities. Done well, the reforms can raise standards while supporting flexible and entry-level roles that are vital for people whose lives don’t fit a fixed 9-5 pattern.

“If the Government fails to consider business needs on policies including guaranteed hours and union rights, they will add complexity and reduce flexibility, ultimately stripping away entry-level and part-time opportunities at precisely the moment the country needs them most.”

Using the four-quarter average for 2025, there were 1.28 million full-time and 1.52 million part-time jobs. The number of full-time jobs was down 140,000 compared with a decade ago. Meanwhile, the number of part-time jobs was down 242,000 over the same period.

Dickinson added: “The loss of almost 400,000 retail jobs over the past decade is the loss of hundreds of thousands of opportunities for young people to start earning for themselves, and for older people to return to the workforce.

“One in five people had their first job in retail, yet this vital step on the career ladder is cracking under the high costs of employment.”