Retail sector job cuts top 125,000 in first 8 months of 2020
More than 125,000 jobs in the UK retail sector have been lost in the first eight months of 2020 – far higher than previous estimates, new data shows.
According to analysis by the Centre for Retail Research, 125,515 retail jobs have been axed and 13,867 shops have permanently shut across high streets, shopping centres and retail parks.
The research found a previously unaccounted 32,598 positions have gone at independent retailers, although the majority of job cuts have been at chain stores and bigger-name brands – with 73,133 losses.
Professor Joshua Bamfield, director at the Centre for Retail Research, said: “There are some good times being had, but the majority of retailers are under incredible pressure. Many retailers really missed the opportunity in the early 2010s to recast their businesses.
“They’re being forced to do it now and they have to move more quickly because what should’ve been done over five years is being done over six months.”
The 125,000 jobs axed in the retail sector do not include those lost in the leisure and hospitality industry, which is suffering its own employment cull.
Some retailers have created positions to cope with extra demand. These include new roles in supermarkets like Tesco and Iceland, alongside online giants Amazon and courier firm DPD. However, concern remains that they will not be enough to cover the shortfall.
British Retail Consortium CEO Helen Dickinson said: “Coronavirus is continuing to have a devastating effect on many retail businesses, with shopping malls and town centre shops suffering significantly lower footfall.
“Government must ensure a more sustainable long-term tax system – avoiding the cliff-edge of rents and business rates in April.
“Without action, the recent job losses we’ve seen across the industry may be just the tip of the iceberg.”
High street stalwarts have already announced major changes and staff cutbacks. Marks & Spencer revealed 7,000 positions would go as sales plunged; Debenhams has put itself into administration protection and slashed 2,500 positions.
John Lewis, the former barometer of the nation’s shopping habits, announced 1,300 jobs were at risk and eight stores will never reopen – including the Birmingham branch which falls under the jurisdiction of its Conservative mayor Andy Street, himself the former boss of the retailer.
The cuts to retail have been felt particularly hard, it is understood that a concerted effort to force the Government into a business rates holiday extension are under way.
Executives at Arcadia and River Island alongside lobbyists representing West End retailers and businesses have been encouraging retailers to write to the Treasury.
Some have also been asked to include estimates of how many jobs they plan to axe in the event an extension beyond the end of March deadline is not granted.
The Treasury wrote off £10.13 billion in taxes due for business rates, fully exempting 358,264 occupied retail, leisure and hospitality properties in England, according to the real estate adviser Altus Group.
Robert Hayton, Altus Group’s head of business rates, said: “Many retailers are clinging on to solvency and for those, an abrupt halt to the current rates holiday could spell the end, full stop.
“Whilst what comes next cannot be a return to pre-pandemic levels of property taxes for retailers, it must strike a balance with public finance affordability. Targeting support to where it is most needed is the only realistic way to achieve this.”
In response to the jobs crisis in retail, the Government has announced a series of attempts to get the public shopping and spending.
These include a Kickstart scheme to encourage businesses to create new jobs for those on low incomes or who are unemployed, which will be funded by the Government for six months. No figures of costs have been revealed so far.
The Chancellor has also promised a Job Retention Bonus of £1,000 per employee brought back to work once the furlough scheme ends in October, resisting calls to extend the furlough payments.
Insolvency Service figures reveal 305,427 positions were reportedly at risk of redundancy, according to filings by businesses, and further plans to increase spending also include encouraging workers back on to the commute to support local businesses in office districts.
London’s West End is facing particular difficulties, with the £5 billion a year spent by tourists vanishing overnight and retailers are pushing the Government to offer tax-free shopping for EU visitors.
Jace Tyrrell, chief executive of New West End Company, representing 600 West End businesses, said retailers expect to see EU visitors returning to the UK first, meaning it is vital to offer them a chance to boost the sector.
He said: “Ensuring that visitors from the EU are eligible for tax-free shopping ahead of the transition period ending on the 31st of December will give the economy a potential billion pound boost that it will desperately need in 2021 and beyond.”
The Centre for Retail Research also found 43,381 jobs have been lost through retailers falling into administration whilst 10,556 posts have been axed through Company Voluntary Arrangements.
Landlords and retailers have been furiously negotiating, with some retailers calling for a switch to sales-based rents, which is already used heavily throughout transport hubs.
A further 71,578 jobs have been shed through “rationalisation” as part of cost-cutting programmes by multiple retailers or small shops simply pulling their shutters for good.
The retail sector generated sales of £384 billion last year whilst employing more than 2.9 million workers directly.