UK retailers face 10% jump in entry-level labour costs

GlobalData

Tue, Apr 8, 2025, 4:04 AM 2 min read

The British Retail Consortium (BRC) has reported a important emergence of supra 10% successful the disbursal of employing entry-level retail unit pursuing an summation successful National Insurance contributions (NICs) and the UK's National Living Wage.

Part-time workers person been peculiarly affected, seeing a 13% outgo increase.

The retail assemblage is bracing for an yearly fiscal interaction exceeding £5bn ($6bn) owed to the changes, with projections reaching £7bn upon the implementation of the Extended Producer Responsibility packaging taxation successful October 2025.

The accommodation to the NIC threshold, which has dropped from £9,100 to £5,000, brings much part-time and entry-level positions wrong the taxation net, perchance discouraging businesses from creating specified roles.

The authorities is simultaneously introducing payment reforms to assistance susceptible individuals find employment.

BRC main enforcement Helen Dickinson stated: "The Chancellor’s October [2024] Budget is present hitting retailers with an other £5bn connected their employment bill. When coupled with the caller packaging taxation successful October [2025], retailers’ costs volition person spiralled by £7bn successful a azygous year. Given slim retail margins of conscionable 2 to 4%, these further costs mean higher prices, less jobs and less stores. A caller survey of retail concern directors showed that fractional were readying to trim hours and workers arsenic a nonstop effect of the leader NIC hike.

“It volition beryllium part-time jobs which instrumentality the biggest hit. While the outgo of employing idiosyncratic successful a full-time entry-level presumption roseate by implicit 10%, for a part-time idiosyncratic it is implicit 13%.”

According to information from the Office for National Statistics (ONS), part-time roles successful retail, which amounted to 1.5 cardinal past year, volition present incur an further 13.5% outgo for retailers based connected a 15-hour workweek.

This represents the lowest fig for part-time retail employment connected record.

The BRC besides cautions that up to 160,000 part-time retail jobs could beryllium eliminated up to 2028.

Dickinson added: “Part-time retail jobs deed their lowest level since records began successful 1996, and person fallen by 200,000 successful the past 7 years. This matters: a local, flexible retail occupation is simply a captious stepping chromatic for galore people, whether it’s a archetypal occupation retired of schoolhouse oregon a part-time relation for idiosyncratic returning to the workforce oregon with caring responsibilities. While the government’s payment reforms purpose to summation the numbers successful work, this week’s outgo increases volition footwear distant the ladder for galore who are conscionable getting their archetypal foothold."

"UK retailers look 10% leap successful entry-level labour costs" was primitively created and published by Retail Insight Network, a GlobalData owned brand.