UK retailers are preparing to cut staff hours and jobs due to rising employment costs and economic uncertainty. According to a survey by the British Retail Consortium (BRC), nearly 61% of retail finance leaders plan to reduce working hours or cut overtime. In addition, more than half (55%) aim to reduce head office jobs, while 42% intend to cut store staff.
These job cuts are likely to increase pressure for political action on youth employment, particularly as fewer entry-level jobs become available in retail and hospitality. The retail sector has already lost 74,000 jobs over the past year, partly due to the adoption of technologies such as AI marketing tools, automated tills, and stock management systems.
Retailers are expected to implement more tech solutions and productivity strategies to further reduce labour costs, especially after a £5 billion increase in employment expenses in 2025, primarily from higher national insurance contributions and an increased minimum wage.
Retailers also face stiff competition from budget-friendly online platforms like Shein, Vinted, and Temu, while demand remains sluggish. With rising energy and food bills, many households are prioritising savings, further impacting spending. These challenges come amid ongoing concerns about employment and global political instability, leaving retailers with little choice but to streamline their workforce to remain competitive.
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