Robert Dyas, Debenhams, Tesco, John Lewis comment on BRC’s Retail 2020 report

A new report by the British Retail Consortium (BRC) sets out how it expects the retail workplace landscape to change to 2020 and beyond.

BRC predicts in its Retail 2020 report that in the coming years, the rate of change within the retail workforce is set to quicken as the digital revolution reshapes the industry, more property leases come up for renewal and the cost of labour goes up, while the cost of technology goes down.

These effects could mean there are as many as 900,000 fewer jobs in retail by 2025 – but those that remain will be more productive and higher earning.

According to BRC, retail is the largest private sector employer in the UK, with 3 million people working across retail and wholesale. The study found there could be 2.1 million by 2025 as a result of ongoing structural change, an accelerated rate of store closures and productivity improvements.

The report also suggests that store closures on UK high streets and town centres could exacerbate the impact on employment in already fragile communities, with weaker regions and the most vulnerable low-paid staff most at risk. But the result will see improvements in the quality and variety of the offer to customers, continuing competitiveness in pricing and greater productivity from fewer but better jobs.

The survey is based on detailed research across the industry, involving the most senior executives in retail businesses. It considers the implications for jobs in the industry, the profile and aspirations of the workforce to 2020 and beyond.

It finds that areas that are already economically fragile are likely to see the greatest impact of store closures and some of the people affected by changing roles will be those who may find it hardest to transition into new jobs that are created.

Smaller businesses are also likely to be disproportionately affected by the ongoing evolution of the industry, as they generally have fewer ways in which to respond to rising costs.

While the primary responsibility for managing all these impacts rests with the industry, the government is also a key player and the report makes a number of recommendations to ensure the successful implementation of policy and to mitigate the impact of the changes expected in places and on people who may be most vulnerable:

These include rebalancing the burden of taxation, by fundamentally reforming the business rates system and ensuring the remit of the Low Pay Commission is strengthened and clarified with regard to the National Living Wage; and greater employer leadership of the apprenticeship levy, including more discretion for employers over how and where it is spent.

BRC chief executive Helen Dickinson said: “The key conclusions of the report are not surprising: there will be a further contraction in retail space and a reduction in the number of people employed in retail.

“Individual retailers will find their own paths to 2020 and beyond but from an industry perspective, we hope to see technology and competition resulting in better experiences for the customer and better jobs for those working in retail.

“From a government perspective, the more significant insights in this report lie in where and how these changes may happen, and the differential impact they are likely to have on people and places across the country – and we would like to work with government to manage the impact of the changes on the most vulnerable”.

Chairman of the BRC and John Lewis Partnership Sir Charlie Mayfield said: “What matters is who and where will be affected most by all this change. These are the valleys to cross and the path through them needs to be chartered with care.

“The report reaches some positive conclusions. Customers will get better choice, better value, more convenience and more personalisation. Retailing will be more productive, powered by better jobs that offer the chance to develop a wide array of skills and greater earnings. Not because of the National Living Wage, but because differentiation between competing retailers will depend on it”.

Robert Dyas chairman Theo Paphitis said: “What this report shows is that without a major rethink by the government around the business rates system and the apprenticeship levy, together with careful consideration of the National Living Wage, the trading conditions for retail are set to worsen significantly. The most vulnerable people and places will be impacted. We are keen to play our part in implementing these policies, but the Government will need to work hard to mitigate their impact.”

Debenhams chairman Sir Ian Cheshire said: “There’s no doubt the structure of the retail industry is changing fast and there will be fewer retail jobs in the future. Retailers will get on with the job in hand. But ensuring that proper account is taken of the potential impact of this change, particularly on different parts of the country and more vulnerable people in the workforce, requires the government and the industry to work together in a new way. We want the jobs that remain to be better jobs – and the way in which the National Living Wage, the Apprenticeship levy and the vital reform of the business rates system are implemented is absolutely crucial”.

Tesco ceo Dave Lewis said: “The combination of price deflation, business rate rises, and growing labour costs is putting increasing pressure on a highly competitive sector which is already going through a time of great change.

“In order to minimise the impact on retail jobs across the country, we need to work in collaboration with government and other key stakeholders to ensure there is a considered response to this structural change. Getting this response right will have a positive impact on the retail industry, but also on the wider economy, social mobility, geographical balance, training and employment more broadly”.

A second BRC report, ‘Retail 2020: What our people think’ will include the detailed findings from a survey of those working in retail across the country. A third report, ‘Retail 2020: Solutions’ will describe how the industry plans to tackle these challenges and opportunities.

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