Recent figures from the KPMG Retail Health Index showed that the sector had its worst performing year on record in 2019, and this has led to a loss in jobs – around 57,000 in fact. One of the key factors was that Christmas trading, which usually provides the sector with a significant boost. In 2019 however, the ‘Golden Quarter’, as it’s often called, failed to deliver the anathema the industry was hoping for. Retail isn’t the only sector to struggle of course. Recruiters Micheal Page announced a profit hit, along with staff cuts, earlier this month as well.
Overall, retail has been suffering from a near 2% reduction in staff year on year since the downturn began. This is certainly a cause for concern, as the industry is the biggest private-sector employer in the UK. Furthermore, it seems that retailers are approaching the future with caution when it comes to hiring. Only 8% planned to increase staff levels in the first quarter of 2020.
Helen Dickson, Chief Executive of the British Retail Consortium suggested the government should take action to help alleviate the tax pressure faced by the sector: ‘…The Government’s review of business rates could not come at a more crucial time. It is essential that they reform this broken system and rectify a tax that sees retail, which accounts for 5% of the economy, pay 25% of the burden.’.
While reducing these rates could certainly help the high street, whether it would be enough for the sector to really bounce back is another matter. Even in a time of more economic stability, should it arrive, influencing factors like Black Friday and Cyber Monday aren’t going away any time soon.
These events alone force retail outlets to slash prices to remain competitive, and doing so often comes at a much greater cost to physical businesses. Additionally, the sector tends to have comparatively low wages, which, when considered against an increasing shift towards more flexible gig economy jobs, means it may become a less attractive option for those looking for part-time work. Replacing lost staff in the event of an upturn could also be challenging in the current climate of high employment. The Government did promise investment in the high street in its manifesto, but whether this will actually materialise or not remains to be seen.