Over 70,000 shop workers lose jobs as online sales & automation take hold

About 72,000 people lost their jobs in the retail industry in the past year as it has been hit by online shopping and automation.

The British Retail Consortium said the number of employees dropped 2.3 per cent in the second quarter of the year compared with the same period in 2018. It marked the 14th consecutive quarter of year-on-year decline.

Retail is on the front line of social and technological changes, with consumers increasingly spending their money on experiences rather than products, and purchasing more online. Roughly 18 per cent of all British retail sales are over the internet today.

Online sales have reduced demand for shop staff and stores are cutting costs by investing in automation, with self-service checkouts now common. Wage costs and business rates have also hammered the sector, with high street names such as HMV and Debenhams going under.

“We have seen retail employment falling across the country,” Helen Dickinson, chief executive of the British Retail Consortium, said. “Such declines are likely to endure, hastened by government policies that continue to add costs to an industry already under immense pressures.”

The consortium has been a fierce critic of business rates, which are charged on premises and disproportionately hit the industry. It said retailers accounted for 6 per cent of GDP but paid 26 per cent of business rates. The rates raise more than £30 billion annually, about the same as council tax.

A higher national living wage has also added to retailers’ costs and has pushed them to invest in automation to bring down pay bills.

The consortium found that job losses were greatest among full-time staff. They suffered a 3 per cent decline year-on-year compared with 2 per cent for part-time employees, as retailers appeared to prize flexibility.

Total hours worked fell by 2.5 per cent, with full-time hours being reduced more than part-time hours. Space taken by stores rose 1.7 per cent, which was down from 2.3 per cent in the first quarter, but the consortium said shops were serving a different role, “centred more on customer experience and offering social activities, for which fewer staff are needed”.

Households are also spending less in the shops. In a report published this month, the CBI, the business lobby group, found that retail sales volumes fell at their fastest pace in a decade in the year to June.

Ms Dickinson urged Boris Johnson to make retail a priority. “With a new prime minister and cabinet in place, there is a clear opportunity to rethink the high street strategy,” she said. “Business rates pose an unsustainable burden on shops and jobs.”