Retail employment plunges at fastest rate since financial crisis
PUBLISHED : August 25, 2020
The UK’s retail employment rate has plunged at the fastest pace since the 2008/09 financial crisis and the worst is yet to come, a new report has shown.
Retail employment fell 45 per cent in the year to August – the sharpest drop since February 2009, according to the CBI.
This compares to the drop of 20 per cent that was recorded in the year to May, during the height of the coronavirus lockdown.
The CBI warned that there could be an even bigger fall of 51 per cent next month, as the government continues to wind down its coronavirus jobs retention scheme.
The CBI’s survey covers a period when a raft of major retailers announced thousands of job cuts, including Debenhams, Dixons Carphone and WHSmith.
Many economists fear a further deluge of job losses in the sector, especially as Chancellor Rishi Sunak has previously confirmed that he would completely phase out the furlough scheme by October.
“The furlough scheme has proved effective at insulating workers and businesses in some of the worst-hit sectors during the pandemic, but these findings reinforce fears that many job losses have been delayed rather that avoided,” CBI lead economist Alpesh Paleja said.
Meanwhile, the CBI said retail sales fell slightly in the year to August after registering an increase in July.
Sales are expected to fall more sharply in September.
While retailers expect a small improvement in the coming quarter, the UK recently entered the largest recession on record after figures showed the Covid-19 pandemic sent the economy plunging by 20.4 per cent between April and June.
“Trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning,” Paleja said.
“Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.
“As a result, further support may well be needed for the retail sector if demand continues to disappoint.”