Almost a third of UK retailers are planning to reduce entry-level roles as changes to the national minimum wage come into force, according to new research from RSM UK.
The survey found that 29 per cent of retailers expect to cut the number of entry-level jobs available, while 48 per cent said they would instead look to recruit more experienced hires.
The findings come ahead of changes due to take effect from April 2026, which will bring the younger age band closer to the main national minimum wage rate.
RSM UK said the shift could make it even harder for young people to secure their first role, particularly as retail remains one of the biggest entry points into the workforce.
Employment tax partner and fair pay lead Chris Robson said: “With around one in eight 18 to 24-year-olds not currently in education, employment or training, the results paint a worrying picture, suggesting the job market is about to get even tougher for those trying to find their first step on the career ladder.
“Future plans to bring in one standardised NMW rate could have unintended consequences, becoming a further disincentive for recruiters to hire younger inexperienced staff.”
Jacqui Baker, partner and head of retail at RSM UK, added that around a quarter of young people begin their careers in retail, more than in any other industry, highlighting the wider impact any reduction in entry-level retail roles could have on youth employment.
The research also suggested retailers are preparing to make broader workforce changes to offset rising employment costs.
Around 31 per cent said they would reduce employee hours, 30 per cent plan to limit staff overtime and 27 per cent said they expect to reduce headcount.
Baker said: “It’s not surprising that retailers are adapting to offset the sharp rise in staff costs whilst maintaining customer experience, but limiting this gateway into the workforce for young people not only further elevates employment costs for retailers, but it could also exacerbate the youth unemployment risk.”
The findings come as close to 400 employers, including several household names in retail, were recently named for underpaying staff, with penalties totalling £7.3m for failing to pay the national minimum wage.
From 7 April, the new Fair Work Agency will gain powers to issue employers 200 per cent penalties for national minimum wage underpayments. It will also begin enforcing other employment rights that have historically faced less scrutiny, including holiday pay and sick pay.
Robson said: “Given the impending Fair Work Agency powers, holiday pay compliance will now present a similar risk and needs to be viewed through a similar lens as NMW compliance.
“Holiday pay has gone under the radar with little enforcement in the past, and therefore less attention from payroll system providers, and those writing policies and contracts.
“The goal posts have moved and non-compliance now brings greater reputational and financial risk, so retailers need to ensure policy and processes are robust.”
