Employment patterns are poised to shift as the industry undergoes digital transformation, but retail roles must be protected.
At the end of February the BRC published a report about how retail is a changing industry – a theme that Retail Week chronicles and many readers experience daily.
The first in a series of three reports, ‘Retail 2020: Fewer but better jobs’, set out to explain how profoundly the industry is changing and how this multifaceted transformation will affect retail employees and the communities they serve across the country.
We found that the number of people working in retail has been falling and the incidence of low pay rising.
This is no accident but a function of the investment and return on digital, costs rising faster than the market is growing, and the consequence of three years of falling shop prices owing to intense competition.
The rate of change is now set to quicken as many more leases come up for renewal while the digital revolution reshapes the industry and the costs of labour versus technology diverge.
This acceleration will be compounded by recent policy announcements – in particular the national living wage and the introduction of the apprenticeship levy – by markedly increasing cost pressures at a time when growth in consumer expenditure remains subdued.
Together these factors could mean that the number of people employed in retail could fall by up to 900,000 in a decade.
There is an upside. Those jobs that remain will be more productive and higher earning as retailers develop better propositions and compete harder across an increasing range of business models from modern multichannel formats through to discounters and online businesses.
But what really mattered in our analysis was not the quantum of jobs but who and where will be affected most by all this change.
We now know that the effects will be uneven across the country and in how they impact on different sizes of business and groups of people in the industry.
Smaller businesses will find it harder than larger ones. And areas that are already economically fragile are likely to see the greatest impact of store closures.
Many of the people affected by changing roles are those who will find it hardest to transition into the newly created jobs.
Our detailed surveying showed people responsible for the care of children and others are less inclined or able to take jobs with more travel or hours that don’t work for them. Where then do they look for alternative employment?
Adjusting to the impact
Over the next few years retailers will work both individually and collectively to improve productivity and the customer offer.
But in order to minimise the impact of the changes we expect to see in places and on people who may be most vulnerable, and to realise the ambition of fewer but better jobs, we also need to work in collaboration with Government.
There are three areas where this should happen. The first is to rebalance the burden of taxation. The changes to the business rates system announced by the Chancellor last month were welcome, but do not go far or fast enough.
“In order to minimise the impact of the changes we expect to see on people who may be most vulnerable, we need to work in collaboration with Government”
Helen Dickinson, BRC
Second is to ensure the remit of the Low Pay Commission is strengthened and clarified to ensure their independence for recommendations regarding future changes to the national living wage.
Third, there must be greater employer involvement in the apprenticeship levy including much more discretion for employers over how and where it is spent.
Getting this collective response right will have a hugely positive impact on the retail industry, but also on the wider economy, social mobility, geographical balance, training and employment more broadly.
Our next report, ‘Retail 2020: What our people think’, to be published in May, will include the detailed findings from a survey of lower paid workers in retail as these are the people most vulnerable to the changes ahead.
The third report, ‘Retail 2020: Solutions’ will then describe how the industry plans to tackle these challenges and opportunities.
If you’d like to get involved our work, then do get in touch.
- Helen Dickinson, chief executive, British Retail Consortium