"Retail finance chiefs are sounding the alarm over surging labour costs, warning that the sector could face a wave of job losses and reduced opportunities if the Employment Rights Act, which came into force in January, is not implemented carefully. The British Retail Consortium (BRC) has published its latest survey of retail Chief Financial Officers (CFOs) and Finance Directors, revealing a sharp deterioration in confidence."
"Over two-thirds (69%) of respondents describe themselves as "Pessimistic" or "Very Pessimistic", up from 56% in July 2025, while only 14% consider themselves optimistic. "Three-quarters of CFOs suggested the 2025 Budget would make it harder to invest," the BRC report notes, reflecting widespread unease about the combined pressures of rising employment costs, weak wage growth, and low consumer confidence. The survey highlights that labour and employment costs have become the dominant worry for retailers."
"The survey highlights that labour and employment costs have become the dominant worry for retailers. A striking 84% of CFOs ranked these costs in their top three concerns for the year ahead, up dramatically from 21% last July. Other major challenges include falling demand (77%), rising input costs (39%), and the growing tax and regulatory burden (29%). The BRC calculates that retail employment costs rose by £5 billion in 2025, driven by increases to employer National Insurance Contributions and the higher National Living Wage."
Retail sector confidence has deteriorated sharply, with 69% of CFOs describing themselves as pessimistic or very pessimistic and only 14% optimistic. Labour and employment costs have surged into the top concern, with 84% ranking them among their top three issues. Retail employment costs rose by £5 billion in 2025 due to higher employer National Insurance and a raised National Living Wage, increasing entry-level full-time costs by 10% and part-time costs by over 13%. Youth unemployment reached 15.9%, about 730,000 under-24s. Firms plan to reduce hours/overtime (61%), freeze recruitment (45%), and cut head office (55%) and store roles (42%), constraining investment and opportunities.
Read at London Business News | Londonlovesbusiness.com
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