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Retail employment figures show temporary respite but it won’t last

A glimmer of hope was provided by the latest set of figures from the BRC-Bond Pearce Retail Employment Monitor. By Gavin Matthews, head of retail at Bond Pearce.

GENERAL MERCHANDISE

Retail employment figures show temporary respite but it won’t last

In the last quarter of 2011, retail employment rose by 0.5% compared with the same quarter a year earlier, the equivalent of 4,074 more full-time jobs according to the sample.  During the same period the number of retail outlets grew by 1.0%, which equates to an additional 528 shops. 

However the Monitor actually measured a net fall in the number of non-food stores in December compared with the same time last year.  The overall increase in the equivalent number of full-time workers and stores was entirely driven by food retailers.

So it seems that seasonal hiring boosted the sector  briefly but sadly this won’t last. We have already seen a number of retailers enter administration since Christmas and there is no sign of any knight in shining armour for the industry. Retailers are also aware that consumers are likely to be tightening their belts for the next few months and this is going to squeeze them and their profit margins even further.

Even so, there are still those who remain fairly optimistic for 2012, despite the tough trading conditions. The disparity between food and non-food retailers remains and some supermarkets will continue to provide growth. However for many non-food retailers the focus is more on survival than growth and those who feel vulnerable already need to do everything they can to prevent outright failure. Redundancy figures are still relatively low but if more retailers fail this may change.

It also seems very unlikely that growth in retail, a major employer in the private sector, will compensate for public sector losses as some had hoped. Indeed the latest period showed 67,000 public sector job losses while the private sector created just 5,000 in the three months to September. 

Stephen Robertson, British Retail Consortium Director General, said: “After a disturbing fall in overall retail employment in September last year, it’s a relief to see marginal improvement at the end of 2011. It’s likely the delay taking on seasonal staff which hit the previous quarter boosted numbers in the last three months of the year. But there’s little to celebrate while the underlying labour market conditions remain so fragile, as we’ve seen in a flurry of post-Christmas administrations. This survey is being compared with a weak end to 2010 when severe snowfall hit retail badly and reduced the hours staff would’ve been working.

“Following reductions in non-food staff numbers during 2011, we’re now seeing stores close. Retailers are focused on reducing costs and reviewing property portfolios, which means employment prospects are weakening. After a raft of retail failures in the first few weeks of 2012 there is a danger more stores will be pushed over the edge. Retailers are facing a 5.6 per cent leap in business rates in April, despite inflation already falling well below this level. The Government can protect the jobs market by showing restraint setting the National Minimum Wage, and by acting more swiftly on employment reforms such as simplifying the tribunal process.”

Employment Intentions for Next Quarter 

The Retail Employment Monitor indicated that 58% of the sample would keep staffing levels unchanged, compared with 54% last year.

The proportion of retailers indicating they would decrease staffing levels rose to 38% compared with 33% this time last year.  Employment intentions in the grocery sector appear more upbeat than those in non-food retailing, a continuing trend since the start of the survey in 2009.

Non-Food Retailers

The fourth quarter continued to show a divergence in food and non-food retail labour markets. Non-food retailers saw a fall in both the number of part-time and full-time hours worked, although the pace of decline eased compared with the previous quarter.  The number of part-time FTE employees fell at a faster rate than full-time. This is also likely to be the result of seasonal staff being employed nearer Christmas compared with the previous year. For the first time since annual comparisons started in October 2009, our sample recorded a decline in the number of non-food retail outlets. 

Food Retailers

Grocery retailers in our sample, which cover over 75% of the market by turnover, continue to open more outlets and employ more people.

The overall rise in the number of FTE employees was driven exclusively by food retailers. Both full-time and part-time hours worked rose, the rate of increase picked up from the third quarter. 

 

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