Tesco, Marks & Spencer and Sainsbury’s joined calls for chancellor John Healey to cut employment costs as retailers pushed for Budget measures to support youth jobs.
The retailers met Healey at Downing Street on October 13 alongside the Co-op and industry bodies, with business rates and youth unemployment among the issues raised.
The British Retail Consortium is calling for the earnings threshold at which employers start paying National Insurance contributions to rise from £5000 to £6000. It argued the change would make it easier for retailers to recruit, particularly into entry-level positions.
The threshold was cut from £9100 to £5000 in April 2025, while the main employer contribution rate increased from 13.8 per cent to 15 per cent.
Retailers have argued the lower threshold hit the sector particularly hard because of its reliance on part-time staff. The BRC said 55 per cent of retail roles were part-time, bringing more workers’ earnings within the scope of employer contributions.
It estimated that the threshold reduction alone added £1.74 billion to retailers’ costs. Combined with the higher contribution rate and two annual increases in the National Living Wage, employment costs rose by £6.5 billion over two years.
The calls came against a backdrop of falling retail employment. BRC analysis of Office for National Statistics figures showed the sector averaged 2.78 million jobs across the four quarters to June 2026, down 62,000 on the previous year and 122,000 over two years.
Part-time retail employment also fell to a record low on the same measure.
Following the Downing Street meeting, BRC chief executive Helen Dickinson said: “His first Budget is the chance to turn that ambition into action by easing costs, making tax fairer and unlocking investment.”
Dickinson said the discussion had covered the industry’s ambitions for growth and tackling youth unemployment. Healey did not set out specific Budget measures at the meeting, City AM reported.
Alongside changes to National Insurance, the BRC called for the government to freeze the inflation-linked increase in business rates and remove shops from the higher business rates multiplier for high-value properties. It said easing these costs would give retailers more scope to invest in staff, stores and technology.
Healey is due to deliver his first Budget on October 28.
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