UK retail employment has fallen to its lowest level on record, according to new figures based on official data, with the British Retail Consortium (BRC) warning that higher employment costs are reducing entry-level and flexible jobs across the sector.

The latest figures from the Office for National Statistics (ONS) show there were 2.76 million retail jobs in March 2026.

Using the four-quarter average, which smooths seasonal hiring patterns, employment stood at 2.79 million in the first quarter of 2026. That was 66,000 fewer jobs than a year earlier and 398,000 fewer than a decade ago.

The findings come as UK retailers continue to face higher labour costs following increases in employer National Insurance Contributions and the National Living Wage. The BRC said these measures have added £6.5 billion in employment costs over a 14-month period.

Labour costs reshape retail hiring

The decline affects both full-time and part-time employment. The four-quarter average shows 1.27 million full-time retail jobs and 1.52 million part-time roles. Compared with a decade ago, full-time employment has fallen by 163,000 jobs, while part-time positions have dropped by 235,000.

The BRC said rising employment costs are making it more difficult for retailers to maintain recruitment levels, particularly for flexible and entry-level positions.

Helen Dickinson, chief executive of the BRC, said, "The impact of rising employment costs cannot be ignored." She added that retail has traditionally been "the UK's main job creator", but said that was becoming "harder to sustain" as employment reaches a record low.

Earlier BRC research also found that many retail finance leaders expect to reduce staff hours, freeze recruitment or cut headcount as businesses respond to higher operating costs and economic uncertainty.

Labour costs have become the sector's biggest concern, ahead of weaker consumer demand and rising input costs.

Flexible jobs under pressure

Retail remains the UK's largest private sector employer and provides a significant share of flexible work for students, parents and carers.

According to the BRC, more than 80 retail chief executives recently urged the government to ensure employment reforms do not reduce opportunities for new entrants to the workforce.

The organisation said some aspects of the Employment Rights Act could make it harder for employers to offer flexible working arrangements if introduced without sufficient flexibility.

Dickinson said the challenge extends beyond the retail sector. "Flexible, entry-level roles" help people gain "skills, confidence and experience", she said, but rising costs and extra regulatory requirements are "choking off opportunities" when they are needed most.

The BRC noted that retail and its supply chain account for almost one quarter of youth employment in the UK, making changes to hiring patterns particularly important for younger workers entering the labour market.

Calls for policy support

The trade body is urging policymakers to balance worker protections with measures that support recruitment and employment growth.

Dickinson said that if the government wants to reduce youth unemployment, it should "bring down the cost of employing young people" while ensuring employment reforms continue to support entry-level recruitment and career progression.

The warning comes as retailers face a challenging business environment. Recent BRC data shows employers are dealing with higher wage bills, increased National Insurance costs and continuing economic uncertainty, even as some indicators suggest consumer confidence is gradually improving.

Industry groups say these pressures are forcing many businesses to review staffing levels and investment plans.