Earlier this month, the Centre for Retail Research found that more than 125,000 jobs in the UK retail sector have been lost in the first eight months of 2020 – far higher than previous estimates.
The research found a previously-unaccounted 32,598 positions have gone at independent retailers, although the majority of job cuts have been at multiple retailers – those with five stores or more, including the bigger-name chains – with 92,917 job axed.
From January 1 to August 1 this year, 43,381 jobs were lost through retailers falling into administration, while a further 10,556 jobs were cut through CVAs. A further 71,578 jobs were shed through “rationalisation” as part of cost cutting programmes launched by retailers or simply shutting down for good.
The total 125,000 jobs axed in the retail sector does not include those lost in the leisure and hospitality industry, both of which are suffering their own employment cull – particularly as the new government measures means the hospitality sector in England will need to shut at 10pm.
The UK’s retail industry was suffering even before Covid-19 escalated into a crisis in March this year, with the pandemic accelerating the wave of job cuts and insolvencies as retailers took a big hit in revenue during the three-month lockdown period. In fact during the lockdown period alone, at least 24,348 retail jobs were cut, according to the Centre for Retail Research.
Jack Wills was perhaps the first major retailer to have announced a raft of store closures just as the UK entered the nationwide lockdown. Since then, the likes of Laura Ashley, Cath Kidston, Burberry, John Lewis, Monsoon Accessorize, Boots, River Island, TM Lewin, Marks & Spencer, Debenhams and several others have all announced job cuts.
So it may raise questions now for retailers to try to attract new staff – particularly as the stubbornly slow recovery since lockdown was eased, coupled with the soon-to-end furlough scheme, is leading to further job cuts and insolvencies.
“People are becoming hesitant to apply for retail roles due to concerns with job security in the current state of the market,” said Andre Hordagoda, chief executive of software company Go Instore.
“Over recent weeks, big household brands… have announced redundancies across the country, and we expect more retailers to follow in their footsteps over the coming months.”
He suggested that employers can alleviate fears of retail job security by adapting their business strategy to reflect the current climate and how it has impacted consumer behaviour.
“UK consumers are now shopping online more frequently than before the Covid-19 crisis, so retailers should be utilising their highly-trained retail staff to support and drive digital sales,” Hordagoda explained.
“Brands should look to redistribute their salespeople and enable them to bring the human touch to online shopping platforms, providing a unique user experience for the shopper from the safety of the customer’s own home.”
Rick Smith, managing director at business management consultancy Forbes Burton, said it would be quite tricky for retailers to encourage employment in the coming months, primarily because of the difficulties currently facing the sector.
“The high street was already experiencing a slowdown even before Covid-19 and the national lockdown,” he said.
“Retailers could encourage people to apply with attractive packages and all sorts of bonuses, but this might not be enough to win people over when what they want now is job security, something that the retail sector is struggling to provide at the moment.”
However, Jake Shoes managing director Jake Bland said there were more cons to working in a physical retail store due to current climate and wider uncertainty. Despite this, he believes bricks-and-mortar retail will bounce back as “people like social interaction”.
“People are becoming hesitant to apply for retail roles due to concerns with job security”
“People ultimately like to wander at a leisurely pace and browse at their ease, while also being able to touch the product,” Bland told Retail Gazette.
Smith agreed in that there were more cons than pros to working in physical retail at the moment.
“The most obvious [con] is that shop workers are constantly exposed to new customers every day, and that brings the risk of catching coronavirus,” he said.
“Secondly, there is a heavy cloud over retailers at the moment, and finances are under constant strain.”
Rob Shaw, managing director at Fluent Commerce, was more upbeat about what the physical retail sector had to offer.
“Consumers will still want to physically see products, socialise and have the ‘experience’ of shopping. I don’t see this changing,” he said.
“What will change, however, is the footprint and layout of stores to provide a welcoming environment for shoppers to browse and checkout safely.
“We will see a metamorphosis of in-store staff at the end of this. It will take investment of retailers into their staff and they will have to adjust the value they place on store staff as a more comprehensive skill set is required.
“Experiential retailing will also become more prevalent which could lead to a number of innovative job opportunities.”
Smith argued that since lockdown ended, the new retail jobs have been advertised have attracted higher-than-usual applications – possibly because of the thousands of people affected by the waves of job cuts and now looking for work.
“During the national lockdown, we heard stories of thousands of people applying for a single job role, and while it has since calmed down a bit, there is still more competition than usual,” he said.
Smith added that retailers that don’t have a strong online presence would suffer, while smaller independent shops could possibly become more popular.
“Regardless, we’re likely to see a decline in the number of physical stores and the jobs that come with them,” he said.
“Retailers could encourage people to apply with attractive packages and all sorts of bonuses”
Shaw argued that because the pandemic has lead to the growth in ecommerce and contactless collections, retailers may need to shift their focus on a huge recruitment drive in delivery, fulfilment and logistics jobs.
“Retail is still at the heart of the UK economy but, it will evolve. We have shifted to online purchases,” he told Retail Gazette.
“That may become the norm and we may well see a pivot as retailers adapt job roles to accommodate this.
“Following this shift, employers really need to make sure that their staff is adaptable and flexible.
“One day you might be serving customers in the store and that is your main job. The next day your main role could be to pick, pack and fulfil online orders in store or serve curbside/click-and-collect customers.”
While the retail industry may be rapidly evolving and shifting, the argument has been made time and time again that this does not necessarily equate to the end of bricks-and-mortar. The objective should not be to change the mindset of consumers who prefer online shopping, but to seek a solution of how to combine the online and the in-store experience.
As consumer behaviours have shifted since lockdown, it could just as well shift again once restrictions are further eased – or re-imposed, especially as we enter the second wave of the pandemic.
What remains clear is that Covid-19 has accelerated a mass shift towards online shopping and that preference is here to stay. If employers are seeking to attract workers, now is the time to offer training and development, encourage up-skilling, or allow employees to further their knowledge across a wide range of areas.