UK retail employment has fallen to its lowest level on record as retailers face higher payroll and wage costs, according to the British Retail Consortium (BRC).
The sector had 2.75 million jobs in June 2026. The four-quarter average stood at 2.78 million in the year to the second quarter. This measure smooths out seasonal changes in employment.
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The four-quarter figure was 62,000 lower than a year earlier, 122,000 below the level recorded two years ago and 410,000 below the level a decade ago.
The BRC estimates that retailers’ employment costs have risen by £6.5bn ($8.8bn) over the past two years. It attributes the increase to higher employer National Insurance contributions and rises in the UK’s statutory minimum wage.
Part-time retail jobs fall to record low
Retail remains the UK’s largest private-sector industry by employment, ahead of hospitality and manufacturing.
Of the 2.78 million jobs recorded on a four-quarter average basis, 1.29 million were full-time and 1.50 million were part-time.
Part-time retail jobs are now at their lowest recorded level. This is significant for a sector that has traditionally provided large numbers of part-time and entry-level roles.
BRC chief executive Helen Dickinson said: “Entry-level retail jobs are vanishing at the very moment they are needed most.”
The consortium also highlighted the impact on younger workers. It said the loss of 122,000 retail jobs over two years had reduced opportunities for people seeking their first experience of employment.
UK retailers face higher employment costs
Changes to employer National Insurance contributions, a payroll charge paid by UK employers, introduced in April 2025 cost retailers an estimated £2.3bn, according to the BRC.
The increase, combined with two above-inflation rises in the National Living Wage, has contributed to an estimated £6.5bn rise in retail employment costs over two years, the organisation said.
The National Living Wage is the UK’s statutory minimum wage for eligible adult workers.
Dickinson described the additional burden as a “tidal wave of employment costs” and warned that further regulatory changes could make it harder for retailers to create and sustain jobs.
The BRC is calling on the UK government to raise the threshold at which employers begin paying National Insurance contributions to £6,000. It argues that this would reduce the cost of hiring.
The proposal is an industry recommendation and has not been adopted by the government.
Employment reforms put focus on flexible staffing
Retailers are also preparing for changes to UK employment law that could affect flexible staffing models.
Reforms being introduced under the Employment Rights Act 2025 include new rights relating to guaranteed hours, advance notice of shifts and compensation when shifts are cancelled, moved or shortened at short notice.
The measures are being introduced in stages. Some provisions are scheduled for 2027, while detailed rules for some reforms are still being developed.
The UK government says the changes are intended to give workers greater security and predictability. The BRC has argued that their implementation should also preserve the flexible and entry-level roles on which many retailers and workers rely.
The issue is particularly relevant to retail, where businesses often use flexible staffing to respond to seasonal and short-term changes in customer demand.
Retail industry targets youth employment
Against this backdrop, UK retailers have pledged to expand work opportunities for young people.
The BRC’s Opening Shift initiative has secured more than 11,000 work-experience pledges as part of a wider industry ambition to create 100,000 opportunities for young people.
Developed with the UK’s Department for Work and Pensions, the initiative involves more than 40 retailers offering placements to people aged 18 to 24 who are not in employment, education or training.
The latest figures highlight the challenge facing the sector: retailers are seeking to create more routes into work while employment costs are rising and the overall number of retail jobs is falling.
Maintaining flexible and entry-level roles will remain a focus for the industry as further employment reforms take effect.
