Many young people start their first job in the world of retail. In fact, retail helps more young people into work than any other sector, according to recent research from M&S.
Despite this, the youth jobs crisis is undeniably a growing problem in the UK.
A new interim report into youth unemployment, published by former minister Alan Milburn, found that job and career opportunities for young people were “not growing” but were “shrinking”.
Additionally, the review claimed that 1 in 6 young people were set to be out of work, education or training in five years unless action was taken.
In response to the issue, the government has rolled out an “employment lifeline” for young people across the country, offering 300,000 new work experience and training placements as part of a £2.5 billion youth employment support package.
The placements come as the government accelerates its “Youth Guarantee,” designed to “give every young person the chance to earn or learn”.
The programme also aims to reverse the growing numbers of young people not in education, employment, or training (NEETs), which currently stands at just over/under one million.
However, the British Retail Consortium (BRC) has cautioned that the government’s youth jobs push risks being undermined by rising employment costs and new regulation.
The BRC’s comments follow a warning from Next CEO Lord Wolfson earlier this month of a “dramatic fall” in entry-level job opportunities throughout the UK due to rising employment costs and weaker hiring conditions.
Demonstrating his point, the exec told the BBC that while his retailer typically received roughly 10 applicants for every shop vacancy two years ago, the figure had now soared to 19.
Recent Office for National Statistics (ONS) figures also revealed that the jobless rate for 16 to 24 year olds had hit 16.2 per cent during the first quarter of the year, marking an 11 year high.
Likewise, retailers have cautioned that higher National Insurance contributions and hikes to the minimum wage are making it more difficult for businesses to create lower-paid and part-time roles for workers.
“The customer experience is suffering”
CEO of retail marketing agency Gekko, Daniel Todaro, agrees that the “increase in the minimum wage and employer national insurance contributions” alongside “growing operating costs and overheads” has “put retailers in a tight spot”.
“Retailers have been stretching their resources as far as possible, and they simply cannot afford to hire inexperienced workers” he argues.
“Regardless of age, staff numbers in retail stores have been reducing for some time, and with fewer roles – and a higher reliance on technology – the customer experience is suffering.”
Founder of luxury retail recruitment firm Fortem & Mode, Ceri Gravelle, acknowledges that retail “has long been one of the most important entry points into work for young people”.
However, she says: “When entry-level opportunities reduce, the impact is therefore much wider than on the immediate headcount.
“If fewer young people are allowed to gain early retail experience, the industry risks depleting its future talent pipeline.”
For retailers, it’s also worth bearing in mind that the physical retail sector is “evolving” in 2026, according to Rightmove Commercial. “At the centre” of its evolution is experiential retail, which “prioritises engagement, immersion and social interaction over simple transactions”.
Echoing this, Gravelle highlights that in-store retail “still depends heavily on people”.
“Technology can improve efficiency, but it cannot successfully replace warmth, brand storytelling or the ability to build trust and rapport with a customer,” she points out.
“If retailers reduce headcount too sharply at store level, service standards can suffer, and that has a direct impact on conversion, loyalty and brand perception.”
Head of the retail division at Everpool Recruitment Samantha Whitman argues that retailers are “trying to adapt” to the situation by “providing more structured entry-level training, shorter, more flexible onboarding, stronger links with colleges, and in-house work placements”.
“The retailers that respond now will be those that treat young workers as a long-term investment, not just an immediate cost,” she explains.
“Building clear progression routes, offering mentoring and making part-time roles more attractive could help retailers protect service standards while developing the next generation of retail talent.”
However, Todaro argues that although “retailers are doing all they can to navigate the issues they are facing” the “onus lies with the government”.
“Casual employment is a vital entry point to the workforce, building transferable life skills and enabling independence amongst young people,” he says.
“Not only does current policy conflict with the government’s goals to grow the economy and get more NEETs into employment, it also penalises UK businesses that are finding it increasingly more difficult to function successfully in an economy burdened by restrictive legislation.”
Gravelle concludes: “Ultimately, rising costs are forcing retailers to think more commercially about workforce planning and ROI.
“But if the sector becomes too cautious with entry-level hiring, it risks solving a short-term cost challenge alongside creating a long-term talent shortage. They must get this important balance right.”
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