Rising Employment Costs Threaten Retail Jobs
Rising employment costs have led to increased anxiety among retail CFOs, with a recent survey indicating that 69% of them feel pessimistic about the future, a significant rise from previous sentiments. The implementation of the Employment Rights Act has intensified concerns surrounding labor costs, which 84% of CFOs now rank as a top issue. Alongside this, falling demand and rising input costs further complicate the landscape, prompting many retailers to consider reducing staff hours and implementing hiring freezes as they navigate these financial pressures. The retail sector is grappling with the fallout from increased employment costs, which rose by £5 billion in 2025 due to higher National Insurance Contributions and wage increases. As a result, more than half of CFOs are planning to cut head office and store staff, while 68% aim to enhance productivity through automation. The chief executive of the British Retail Consortium highlights the fragility of the economy, noting that reforms must prioritize both business needs and the creation of flexible, well-paid jobs to prevent further job losses, especially among youth, who face rising unemployment rates.
