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Highlights
- Sharp Increase in Retail Job Losses: Over 169,000 retail jobs were lost in 2024, marking a 42% increase compared to 2023.
- Key Drivers Include Rising Costs: Inflation, energy prices, rents, and reduced tax relief are exacerbating job cuts.
- Forecast for 2025: Up to 200,000 retail jobs could be at risk due to budget changes and reduced business rate discounts.
The retail industry has witnessed its most significant staff reductions since the COVID-19 lockdowns of 2020, with over 169,395 jobs lost in 2024. According to a report released by the Centre for Retail Research (CRR) and Altus Group (TSX:AIF), this figure represents a staggering 42% increase compared to 2023.
A combination of economic pressures, including rising costs and changing consumer habits, has driven the trend, with expectations of further reductions in 2025.
2024: A Challenging Year for Retail Employment
The year 2024 was marked by a wave of retail administrations, with companies such as Carpetright, Body Shop, Homebase, Lloyds Pharmacy, and Ted Baker among the 38 retailers to collapse. These closures contributed to one-third of the high street job losses recorded during the year.
Professor Joshua Bamfield, director of the CRR, pointed out that 2023’s relatively lower job loss figures now appear as an anomaly. "The problems of changed customer shopping habits, inflation, rising energy costs, rents, and business rates have continued and forced many retailers to cut back even more strongly in 2024," he said.
Economic Challenges Amplify Industry Struggles
The report highlights several factors that have exacerbated the retail sector’s difficulties:
- Inflation and Energy Costs: Persistent inflation and soaring energy bills have placed additional financial strain on retailers, pushing many to reduce their workforce.
- Changing Consumer Behaviors: Post-pandemic shifts in shopping habits, including a greater reliance on e-commerce, have reduced foot traffic in brick-and-mortar stores.
- Business Rates and Tax Changes: Upcoming changes to the business rates discount, combined with increased rents, have further strained independent retailers.
Outlook for 2025: More Reductions Ahead
The CRR predicts that the retail sector could lose over 200,000 jobs in 2025—an average of 550 jobs per day. Recent tax measures and wage increases announced in the government’s Budget are expected to intensify these challenges.
From April 1, 2025, the current COVID-related 75% discount on business rates will be replaced by a less generous 40% discount, disproportionately affecting small and independent retailers. According to Alex Probyn of Altus, “The cut in the business rates discount will see bills rise by an average of 140%, adding significant costs for the average shop.”
Implications for the Retail Sector
The expected workforce reductions underline the broader struggles facing the high street. Without significant structural changes or additional support, the sector’s reliance on cost-cutting measures may deepen, affecting not only jobs but also the overall vibrancy of retail hubs.
While the report notes some hope for the sector, driven by innovations and efficiencies, the road ahead appears challenging as economic pressures persist and retailers adapt to a new normal.
