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Job creation struggles in retail sector

Published: 28 April 2011
While the number of full-time jobs in UK retail picked up in the first quarter of 2011, March figures saw a decline on last year, with a sharp increase in the number of redundancies.
Job creation struggles in retail sector
According to the latest BRC figures, in Q1 2011 there were the equivalent of 3,400 more full-time jobs in UK retail than the same quarter a year ago, an increase of 0.5%. However, comparing March with the same month in 2010, the equivalent number of employees dropped by 0.8% - impacted by slowing consumer demand and Easter falling in April this year.

While the rate of redundancies in the retail sector declined consistently from September 2010 to February this year, March's figures saw a sharp increase. With the retail sector under pressure from rising costs and an increasing strain on consumer spending, the BRC explains that the redundancy rate will be an important indicator over coming months.

However, head of retail employment at law firm Bon Pearce, Christina Tolvas-Vincent is keen to point out that jobs are still being created in the retail sector. "Consumer incomes are still being squeezed by inflation and the retail sector is suffering from a lack of consumer confidence - this quarter's figures contain no surprises in that respect. However, we remain in positive territory with jobs still being created - albeit on a smaller scale."

The sector is continuing to expand, with the number of retail outlets growing by 5.3% during Q1 - an additional 837 shops. Even March, with its decline in the number of jobs created, reported a 5.1% increase in store numbers compared with the same month in 2010.

Looking to the next quarter, 63% of retailers surveyed in the BRC-Bond Pearce Retail Employment Monitor indicated that they would keep staffing levels unchanged in the next three months. Meanwhile, 29% of retailers said they would decrease staffing levels, compared with 8% this time last year.

Commenting on the overall findings, BRC director general Stephen Robertson said: "These figures confirm how tough the trading environment is. Retail is still creating more jobs than other sectors but numbers for the quarter rose at their slowest rate since this survey began at the end of 2009. Comparing just March with March a year ago, retail employment actually fell. That can partly be attributed to the fact that Easter is in April this year, but the difficult retail climate is the key factor and will be for some time to come.

"Consumer demand is weak and retailers, looking ahead and trying to keep their operating costs down, are less optimistic about future employment. Even so, the retail sector generally continues to expand."

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