1. Analysis
September 10, 2020

125,000 jobs lost in the UK retail sector so-far this year, says study

Almost 125,000 retail jobs in the UK have been lost so-far this year and roughly 13,867 stores have closed permanently, according to the Centre for Retail Research (CRR).

By Jessica Paige

124,515 job losses in the retail sector were recorded between 1 January and 31 August this year. These losses include 7,000 jobs from M&S, 2,500 from Debenhams, 4,000 from Boots and hundreds more from retailers like Harveys, Arcadia Group, and Cath Kidston.

This figure is 31.5% higher than for the same period in 2019.

The study conducted by CRR showed that 48,381 jobs were lost through retailers falling into administration, 10,556 jobs lost through Company Voluntary Arrangements (CVAs), and 71,578 jobs lost through cost-cutting programmes.

While the consequences of Covid-19, such as the UK lockdown and recession, have added to the unemployment rate, CRR director Joshua Bamfield said that “retail was already in crisis before the pandemic.”

Bamfield said: “Covid-19 has been a real hammer blow for retailers, many of which were not in good health before the contagion took a hand. The prospects for many non-food retailers are bleak.”

Earlier this week, the British Retail Consortium (BRC) warned that September would see further job losses in the retail sector due to high-street retailers experiencing record-low footfall.

Last month, the Confederation of British Industry (CBI) released survey results which showed that staff losses are occurring faster in the retail industry than in February 2009 when the UK was last in recession.

“While sales figures have recovered to pre-Covid-19 levels, the balance has shifted.”

Germany-headquartered enterprise software company Software AG senior director of industry solutions Oliver Guy said that these job losses reflect a “complex” UK retail landscape.

Guy said: “The retail job cuts are an unfortunate reflection of the challenges retailers are currently facing. Taking in the context of Primark’s post-lockdown success and the creation of new jobs at Tesco and Iceland, the announcement paints a picture of the complex and contrasting UK retail landscape – in both offering and performance.

“While sales figures have recovered to pre-Covid-19 levels, the balance has shifted. Clothing and footwear sales have continued to suffer and household names like Marks & Spencer, Boots, and Debenhams have all announced thousands of job cuts.

“In response, retailers are pivoting to digital (platforms) to minimise disruption, with Walmart trialling automated micro-fulfilment centres, M&S launching its long-awaiting partnership with Ocado and Pret unveiling its new coffee subscription service.

“The pandemic has put the spotlight on digital, with five years’ worth of transformation realised in a matter of months. Though digital doesn’t just mean online sales, just look at Primark for example, they sell nothing online.

“Investments in digitising back-end logistics and supply chains oiled by transparency and automation are equally, if not more important than selling online.

“Those with digital capabilities are showing themselves to be more resilient and every other organisation is sitting up and paying attention.”