Retailers report productivity rise ahead of Government meeting

In the year to September 2016, retail productivity improved by 2.7% compared with 0.4% for the UK generally, BRC data shows.

Output per hour climbed to £22.20, up from £20.21 two years earlier. However, that remains below the £31.40 achieved in the UK overall last September.

The figures were released ahead of a retail roundtable next week hosted by Business Secretary Greg Clark to discuss the part retailers can play in the Government’s industrial strategy and closing the productivity gap between Britain and other countries.

It will be attended by executives from retailers including Amazon, Asos, the John Lewis Partnership, Kingfisher and Tesco, along with the BRC.

BRC chief executive Helen Dickinson said: “We expect retail to continue outpacing the UK average as the structure of the industry changes provided there is the right policy environment, which is why the industrial strategy is so important.”

The improvement in retail productivity follows investment in innovation, she said.

“Valuable information”

In 2015, retailers invested £3.9bn in areas of business such as technology as they sought to adapt to the seismic shifts that the digital revolution has wrought on shopping habits and traditional business models.

Dickinson said: “The technological revolution is fundamentally altering the way retail businesses operate and the skills needed for future success.

“We have a choice between improved productivity driven by better jobs, innovation and new skills for the digital age and improved productivity driven primarily by a shrinking UK retail workforce.

“As our industry co-operates to share data and developments, we will be able to provide Government with valuable information about what transforms productivity.

“At a time when UK retail is having to find 20% of its current profitability to mitigate the impact of uncontrollable increases in its cost base and against a backdrop of inflation and slow growth, the industry’s commitment to improving productivity will require the support of Government policies that allow room to invest in skills and technology for the digital age.

“This is where we see a retail opportunity in the Government’s industrial strategy.”

The productivity data will be updated quarterly as part of the BRC’s newly launched Retail 2020 Dashboard, which also measures trends in pay, employment and staff engagement.