Britain’s largest retailers have cut almost 18,000 jobs over the past year, as rising employment costs and economic uncertainty prompt businesses to rein in hiring and look for ways to operate more efficiently.
An analysis by financial news outlet Bloomberg of annual reports from some of the UK’s biggest retail employers found workforce reductions across supermarkets, department stores and high street chains, despite several businesses continuing to expand their operations.
The job losses come as retailers face higher National Insurance contributions, increases to the National Living Wage and wider cost pressures across supply chains. Industry leaders have warned that the combined impact is making employers more cautious about recruitment and investment decisions.
Tesco leads workforce reductions
The biggest reduction was reported by supermarket giant Tesco, which saw its UK and Ireland workforce fall by almost 5,000 during its latest financial year.
Other major retailers also reported lower employee numbers. Supermarket chain Sainsbury’s, employee-owned department store group John Lewis Partnership and home improvement retailer Kingfisher each reduced average headcount by around 3,000 employees over the year.
Clothing and homewares retailer Next and sportswear chain JD Sports Fashion also reported workforce reductions of roughly 1,500 employees each. The figures contrast with the previous year, when many of the same retailers expanded their workforces.
Helen Dickinson, chief executive of trade association the British Retail Consortium, said higher employment costs were affecting hiring decisions across the sector.
“Retailers are facing significant cost pressures from higher National Insurance contributions, rising wage bills and continued global instability,” she told Bloomberg. “That pushes up costs across supply chains, leaving many businesses more cautious about hiring.”
Concerns for entry-level jobs
The reductions have renewed concerns about employment opportunities for younger workers, particularly as retail has traditionally provided one of the most accessible routes into the labour market.
Recent figures reveal that more than one million people aged 16 to 24 were not in employment, education or training during the first quarter of the year, the highest level since 2013.
Industry groups have warned that rising employment costs could reduce the number of entry-level and part-time roles available, particularly for younger workers seeking their first jobs.
Earlier this year, the British Retail Consortium warned that up to 160,000 part-time retail jobs could be at risk over the next three years as employers absorb higher operating costs. According to the organisation, part-time positions are often the first to come under pressure when businesses seek savings.
Growth with fewer workers
The workforce reductions do not necessarily reflect declining business activity.
Several retailers have continued to invest and expand despite employing fewer people. Tesco, for example, opened 83 stores in the UK and Ireland during the year and increased its overall retail space.
The trend reflects a broader focus on productivity, automation and efficiency across the retail sector, with many businesses seeking to grow sales while limiting increases in staffing costs.
Some retailers have also indicated that further workforce changes may be under consideration. Discount chain B&M European Value Retail has warned that higher employment costs could lead to job reductions in future, although its headcount increased during the past year as it opened additional stores.
The figures are likely to intensify debate over the impact of rising employment costs on hiring, particularly in sectors that employ large numbers of lower-paid and part-time workers.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
