The UK retail sector could be at risk of creating a “jobless generation” after employment in the industry fell to its lowest level on record, according to new data from the Office for National Statistics.
Retail employment averaged 2.81 million roles in 2025 on a four-quarter basis, down 68,000 year on year and 383,000 lower than a decade ago, marking a significant contraction in one of the UK’s largest employment sectors.
The decline has been driven by sustained reductions in both full-time and part-time roles. Full-time retail employment fell to 1.28 million in 2025, down 140,000 compared with 2015, while part-time roles dropped by 242,000 over the same period to 1.52 million.
The British Retail Consortium warned the fall in jobs is eroding one of the UK’s most important entry points into the workforce, particularly for younger people.
Helen Dickinson, chief executive of the BRC, said: “People everywhere are struggling to find jobs, youth employment is falling faster still, and the UK faces the prospect of a jobless generation.
“The loss of almost 400,000 retail jobs over the past decade is the loss of hundreds of thousands of opportunities for young people to start earning for themselves, and for older people to return to the workforce.”
Retail remains a critical gateway into employment, with around 780,000 young people working in the sector, the equivalent to 28 per cent of the total workforce. However, the BRC warned this pathway is increasingly under pressure as employment costs rise and hiring slows.
According to the trade body, the cost of employing a full-time entry-level retail worker rose by 10 per cent in 2025, while part-time employment costs increased by more than 13 per cent.
The warning comes as the number of young people not in education, employment or training approaches one million, raising broader concerns about labour market participation and long-term economic impact.
Retail leaders have also raised concerns over the potential impact of the government’s upcoming Employment Rights Act, particularly around proposals for guaranteed hours.
The BRC said poorly implemented reforms could reduce flexibility in the labour market, a key feature of retail employment, and discourage businesses from creating part-time roles.
Dickinson added: “Seventy per cent of young people say that flexibility is important at work, but this flexibility is now under threat.
“The priority must be clear: protect workers and protect job creation. The goal should be to tackle bad practice without making recruitment more complex, risky or expensive.”
The concerns have been echoed across the sector. Nick Stowe, chief executive of Monsoon and Accessorize, recently warned that overly rigid contract requirements could make it harder for retailers to flex staffing levels in line with seasonal demand.
The latest ONS figures also point to broader softness in the labour market, with total UK payrolled employees falling by 49,000 in February, vacancies declining to 721,000 and unemployment holding at 5.2 per cent.
Click here to sign up to Retail Gazette‘s free daily email newsletter
