Retail employment falls as costs rise
According to the latest ONS figures, there were 2.76 million retail jobs in March 2026, raising concerns that rising employment costs are reducing the number of entry-level and flexible job opportunities available across the industry.
Using the four-quarter average which smooths out the seasonal variations in hiring, there was was 2.79 million jobs for Q1 2026, 66,000 fewer than a year earlier, and 398,000 fewer than in Q1 2016. This four-quarter average is the lowest on record.
Using the four-quarter average, there were 1.27 million full-time and 1.52 million part-time jobs. The number of full-time jobs was down 163,000 on a decade ago. Meanwhile, the number of part-time jobs is down 235,000 over the same period.
Declining retail employment comes as the industry faces an additional £6.5 billion in employment costs over a 14-month period as a result of increases to employer National Insurance Contributions and the National Living Wage.
Retail leaders have also raised concerns that aspects of the Employment Rights Act, if implemented without sufficient flexibility, could make it harder for businesses to offer the flexible and entry-level roles that many people rely on.
As the UK’s largest private sector employer, retail provides hundreds of thousands of flexible and entry-level opportunities. In a recent letter coordinated by the British Retail Consortium, more than 80 retail CEOs warned that rising employment costs and additional regulatory burdens risk closing off opportunities for young people and reducing the flexible roles relied upon by students, parents and carers.
Commenting on these figures, Helen Dickinson, chief executive at the British Retail Consortium, said: “The impact of rising employment costs cannot be ignored. Retail has long been the UK’s main job creator, but that is becoming harder to sustain. Employment has fallen to a record low as costs continue to rise. At a time when the economy needs growth, retailers and households need policies that support job creation, not puts them at risk.
“For the young, the pressures are greater, with the number of young people not in education, employment, or training to reach 1.25 million over the next five years. Retail and its supply chain is almost a quarter of all youth employment. Flexible, entry-level roles that help people gain skills, confidence and experience and are a vital route into work, but rising employment costs and additional regulatory burdens are choking off opportunities at a time when they’re needed most.
“If government is serious about tackling youth unemployment, it must bring down the cost of employing young people and ensure employment reforms support entry-level recruitment and progression. Retailers stand ready to work with government to help more young people take that crucial first step on the career ladder.”