UK retail jobs are at risk as rising employment costs push shop chains to cut staff hours and freeze hiring, the British Retail Consortium (BRC) has warned. Its latest survey of retail chief financial officers and finance directors found that more than half plan to reduce staff hours or overtime, while almost half intend to cut head-office roles.

The survey found 52 per cent of finance chiefs plan to reduce the number of hours or overtime worked by staff, and 32 per cent expect to freeze recruitment. Almost half (48 per cent) plan to reduce head-office headcount and 32 per cent plan to cut roles in stores. Retailers said they would instead lean on productivity (68 per cent) and automation (61 per cent).

The warning comes against an already difficult backdrop. Retail employment costs rose by £5 billion in 2025, driven by higher employer National Insurance contributions and a higher National Living Wage. The BRC calculates that the cost of employing a full-time entry-level worker rose by 10 per cent, and by more than 13 per cent for a part-time worker.

The sector has shed 74,000 jobs in the past year and more than 250,000 over the last five years, taking total retail employment to 2.76 million, the lowest level on record. Youth unemployment has risen to 15.9 per cent, with 730,000 under-24s unable to find work.

BRC chief executive Helen Dickinson said the Employment Rights Act, which became law in January, is the biggest shake-up of employment rules in a generation, and how it is delivered "will make or break job opportunities". She warned that if the government fails to consider business needs on guaranteed hours and union rights, retailers will cut flexibility and entry-level opportunities "at precisely the moment the country needs them most".

[Source: brc.org.uk](https://brc.org.uk/news-and-events/news/corporate-affairs/2026/ungated/retail-jobs-at-risk-from-rising-employment-costs/) | [Source: retail-systems.com](https://www.retail-systems.com/rs/Retail_Sector_Plans_To_Cut_Jobs_And_Hours_As_Employment_Costs_Surge.php)