Nearly 400,000 UK retail jobs lost over decade as industry warns of further tax pressure

New figures from the Office for National Statistics show the number of jobs in the UK retail sector fell to a record low of 2.78 million in June, down 97,000 on the year, and almost 400,000 lower than a decade ago, prompting trade bodies to warn that last year’s tax and cost increases are forcing firms to cut staff and risk further job losses.

Retail bosses and sector representatives said the decline reflected the combined impact of higher operating costs introduced in the Chancellor’s Budget last year and the threat of additional charges at the next Budget on Nov. 26. The British Retail Consortium said the figures were a “stark warning” and cautioned that reforms in the Employment Rights Bill could have a “materially negative impact on employment” according to the Office for Budget Responsibility.

Trade groups detailed the cost pressures they say are weighing on the sector. Retailers estimate measures introduced last year — including increases to employer National Insurance contributions, rises in the National Minimum Wage, higher business rates and new packaging taxes — have added about £7 billion in costs. Major chains including Tesco, Morrisons and Currys have cut jobs since those increases were introduced, while several smaller retailers such as Quiz, Seraphine and Claire’s have entered administration.

Kate Nicholls, chief executive of UK Hospitality, said the hospitality sector was also struggling and reported 84,000 job losses since the Budget. “Hospitality is being taxed out and the sheer scale of cost increases hitting the sector is forcing businesses to make tough decisions to cut jobs, raise prices, slash investment and reduce hours,” she said.

BRC chief executive Helen Dickinson said the combination of past cost rises and potential further measures risked driving up prices and reducing employment on the High Street, with local and flexible jobs at particular risk. The BRC and other trade bodies have urged the government not to increase costs to retailers in the coming Budget.

Retail leaders also warned that planned changes to employment law would make it harder to hire young people and could further dampen recruitment. The Employment Rights Bill has been cited by the OBR as likely to have negative labour-market effects, a point used by industry groups to press for caution on additional employer-facing measures.

Giles Hurley, chief executive of Aldi UK, urged policymakers to consider carefully any proposals that raise business operating costs, saying they risk translating into higher prices for shoppers.

The ONS figures underline a decade-long contraction in retail employment and a recent acceleration of job losses following last year’s fiscal changes. Industry representatives said an autumn Budget that avoided additional cost burdens would be critical to stabilising employment and investment decisions across retail and hospitality.

Government departments did not immediately respond to requests for comment on the ONS figures and industry warnings.