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Retail sales and retail staff numbers both falling fast: analysis

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UK retailers have cut jobs over the past three months at the fastest rate since records began in 2008, it emerged this week – as did the news that retail sales have dropped significantly over the last year.

Reporting the fast reduction in staff in the industry, the British Retail Consortium said in the BRC Retail Employment Monitor for the third quarter of 2017, that hours worked in retail fell by 4.2% over the period, with reductions in both full-time and part-time hours. At the same time, the total number of employees fell by 3% on last year. It put the fall down to both technology and to Government policy.

Helen Dickinson, chief executive of the BRC , said: “The pace of job reductions in the retail industry is gathering steam. The three months to September saw the sharpest year on year drop in hours and employment since the monitor started in 2008. Behind this shrinking of the workforce is both a technological revolution in retail, which is reducing demand for labour, and Government policy, which is driving up the cost of employment. With both supply and demand pushing in the same direction, it’s little surprise that we’re seeing fewer people working in the industry.

“However, along with falling employment has come pay growth well in excess of the UK average; made possible by productivity gains that have outstripped those of other industries. The challenge for retailers will be in maintaining the pace of productivity improvement as they come up against shortages of the skills needed for a new, digital-dependent industry. In his budget next month, the Chancellor will have an opportunity to provide additional flexibility in the use of Apprenticeship Levy funds to enable retailers to rollout digital skills training to a workforce that covers nearly 10% of all UK employment. We urge him to take it.”

Meanwhile, the latest monthly CBI Distributive Trades Survey, which questioned 106 businesses including 49 retailers, showed retail sales falling at the fastest rate in the year to October since March 2009, the height of the financial crisis. Some 15% of retailers said sales volumes were up in October compared to a year ago, while 50% said they were down. The rounded balance of -36% was well behind expectations of +23%. Orders placed with suppliers also fell quickly at a balance of -43%. In March 2009 the figure stood at -47%. Online sales grew by a balance of +45, though this was lower than the +54% recorded in the year to November.

Heather Barson, director of retail and hospitality at Fujitsu UK, responded to the BRC figures by emphasising the importance of technology and retail staff working together rather than against each other.

“Since the industrial revolution we’ve seen how emerging technologies have the potential to reshape the way we work,” she said. “Today, retailers are one of many industries at the forefront of this revolution, privy to the role that technology plays in differentiating their experiences from the competition.

“Retailers should be using these technologies to remove repetitive tasks, and make way for employees to spend more time focusing on the customer. Doing this will allow them to better provide a more personalised service for customers, complementing the experience they find online. Whilst technology can be used to improve a retailer’s service and better equip staff, the human touch will always be necessary to make that emotional connection. And when considering the ever increasing rise in multi-faceted jobs, prioritising technology to take on the time-consuming and mundane tasks will help create a new set of jobs with a new skill set that balances the retail roles that are now using technology.

“In a world where retailers are increasingly needing to think of innovative ways to provide that ‘heightened experience’ that consumers now demand, retailers should be bringing technology and employees together, not tearing them apart. After all, whilst technology is transforming the workplace, humans are the ones who will accelerate its impact.”

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