Retailers in the UK are warning that rising employment costs and new workplace rules are making it harder to create entry-level jobs for young people, as youth unemployment continues to increase.
New polling published by the British Retail Consortium found that 49% of the public believe unemployed young people need more government support to find work.
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The survey comes as official figures show youth unemployment among 16 to 24-year-olds has reached 16%, with about 713,000 young people out of work.
The findings reflect growing concern across the retail sector about the availability of flexible and entry-level retail jobs, which have traditionally provided a route into employment for younger workers.
Retail remains one of the UK’s largest private-sector employers, with around 2.8 million workers, including roughly 780,000 employees aged between 16 and 25.
Pressure on entry-level jobs
The BRC said higher wage bills and increased employment taxes are raising the cost of hiring staff across the retail industry.
Businesses have faced two increases to the National Living Wage in recent years, alongside higher employer National Insurance Contributions and lower contribution thresholds. The BRC said these changes have increased employment costs for retailers by more than £6bn over two years.
Helen Dickinson, chief executive of the BRC, said “opportunities for young people are disappearing in front of our eyes”.
She said “hiring is more expensive” while wider business costs continue to rise. Dickinson also warned that the UK risks “sleepwalking towards a jobless generation” if employment costs and administrative burdens continue to increase.
Retailers have already begun reducing costs in response to weaker consumer demand and higher operating expenses. Recent BRC survey data showed many retailers plan to cut staff hours, reduce overtime and remove some head office and in-store roles during 2026.
The retail sector has also faced wider pressure from automation, online competition and investment in artificial intelligence systems aimed at improving productivity and reducing labour costs.
Calls for government support
The BRC polling found that 53% of respondents support reducing costs and hiring requirements for employers taking on workers under 25. Only 7% disagreed.
Concern about youth unemployment was strongest in Wales, where almost two-thirds of respondents said younger unemployed people need more support into work.
The retail industry has backed government programmes such as the Youth Guarantee scheme and the proposed Youth Jobs Grant, which aim to increase work placements, apprenticeships and training opportunities for younger people.
Business groups and labour market experts say many young people are struggling to gain work experience or secure their first job. Research published by the Institute for Public Policy Research found that fewer than half of young adults felt prepared for work after leaving education.
Separate polling by the Trades Union Congress found that more than half of young people believe there is not enough state support to help them access entry-level jobs with training and career progression.
Debate over employment reforms
Retail groups are also raising concerns about the implementation of the UK Employment Rights Act, arguing that some proposed reforms could reduce flexible working opportunities often used by younger employees and students.
The BRC said many young workers value part-time and flexible retail roles while studying or gaining work experience. It warned that poorly implemented reforms could unintentionally reduce job openings for first-time workers.
The debate reflects wider tensions between improving worker protections and maintaining hiring flexibility during a period of economic uncertainty.
Recent evidence submitted to UK lawmakers showed many employers are increasingly prioritising experienced workers because of higher labour costs and slower economic growth.
Youth unemployment and economic inactivity among younger people have become major political and business concerns across the UK.
Government figures and industry groups have warned that the number of young people not in education, employment or training is approaching one million, increasing pressure on policymakers and employers to create clearer pathways into work.
