Are One-Third Of Retail Jobs On The Way Out?

Recent data indicate that in the not-so-distant future, the retail marketplace will be employing far, far fewer people — if you live in the U.K. anyway.

As of right now, retail employs about one-sixth of retail workers — or around 3 million people. Retailers, however, expect to see that figure fall by 1 million by 2025 as advances in technology, changing consumer habits and increased standards around the minimum wage continue to move around industry-wide trends.

The upside, according to the British retail consortium, is that the jobs left behind will be better paid and more professional, aligning with a “fewer but better jobs” mantra about the future.

“What matters is who and where will be affected most by all this change,” said Sir Charlie Mayfield, chairman of the BRC and John Lewis, according to Financial Times. “These are the valleys to cross and the path through them needs to be charted with care.”

The prevailing opinion among retailers surveyed by the Financial Times was that the declines being predicted were in line with their current plans for right-sizing their organizations.

“The combination of price deflation, business rate rises and growing labor costs is putting increasing pressure on a highly competitive sector which is already going through a time of great change,” noted Dave Lewis, Tesco chief executive.

The falling figures for future employment in the sector lead the introduction of the “national living wage” — a boost in the minimum wage to £7.20-an-hour ($9.92) for those aged 25 and over that will reach £9 an hour ($12.47) by 2020.

“The retail industry is supportive in principle of the NLW but the effects on employment have been underestimated,” the report said.

Across the Atlantic, big retailers are running into similar issues, though higher wages are coming more as a turn industry attitude and ahead of formal moves to up the legally mandated minimum wage. Walmart has moved to $10 an hour wages for even junior staff — 40 percent over the $7.40 national minimum.

“Our customers and associates are noticing a difference,” said Judith McKenna, chief operating officer of the U.S. business.

U.K. officials estimate that the booted minimum wage laws will cut about 60,ooo jobs from the economy by 2020, but there is no clear consensus on what the overall effect on Britain’s labor market will be. Generally speaking, at present, employment is high, but wage levels are fairly stagnant and proponents state that the boost in productivity will stimulate the economy.

A Treasury spokesperson said, “We are already seeing record employment rates and more people in employment than ever before. And taking into account the national living wage the independent Office of Budget Responsibility expects employment to rise by a further 1.1m by 2020.”