Retailers are to axe staff as cost pressures including business rates eat into their profits according to the British Retail Consortium-Bond Pearce Retail Employment Monitor.

The closure of Jessops’ stores will contribute to staff cuts in the first quarter

Half of retailers expect to cut staffing levels in the first quarter of 2013 - a big increase on last year when just a third of retailers anticipated reduced staffing levels, the British Retail Consortium (BRC)-Bond Pearce Retail Employment Monitor revealed.

In the fourth quarter of 2012, retail employment edged up 0.6% driven entirely by an increase in part-time workers.

BRC director-general Helen Dickinson said retailers are expected to let seasonal staff go during the first quarter.

She added the extent of the deterioration in employment levels “further highlights testing times still to come”.

Employment figures for the first quarter of 2013 will be hit by the thousands of job losses made following the collapse of Blockbuster, HMV and Jessops this month.

The staff cuts expected from January to March will immediately precede the 2.6% rates increase in April.

Retailers are bracing themselves for an additional £175m bill this year. This follows two years of steep business rates increases estimated to have burdened retailers with an additional £500m of costs.

Dickinson added: “Supporting retail investment and employment is essential to economic recovery. The Government can help by freezing business rates in April.”

Retail Week and the BRC are lobbying the Government to freeze business rates for retailers through the Fair Rates for Retail campaign.

But retailers were dealt a blow on Tuesday when business secretary Vince Cable dismissed calls for the Government to help the retail sector. He said the Department for Business only has a “modest” role to play in supporting the sector.

He added: “What’s happening in the retail sector is partly a result of not a lot of economic growth and that is pressure to bear.”