The UK retail sector is facing a significant decline in employment, according to new data from the Office for National Statistics (ONS). As of June 2026, the industry employed 2.75 million people, with a four-quarter average of 2.78 million in the year to Q2 2026.
This represents a drop of 62,000 compared to the previous year, 122,000 fewer than two years ago, and a staggering 410,000 less than a decade ago. The figures reveal the lowest four-quarter average on record, with part-time roles bearing the brunt, reaching an all-time low of 1.50 million.
Despite the downturn, retail remains the largest private-sector employer in Britain, surpassing hospitality and manufacturing. The decline is largely attributed to soaring employment costs. Changes to National Insurance contributions, implemented in April 2025, added an estimated £2.3 billion to retailers’ expenses.
Coupled with two consecutive above-inflation increases to the National Living Wage, the sector’s total employment costs have surged by £6.5 billion in just two years. Helen Dickinson, chief executive of the British Retail Consortium, expressed concern over the disappearance of entry-level retail jobs, which are key for young people’s career development.
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Dickinson highlighted the impact of job losses, stating, With one in seven young people now not in education, employment or training, the loss of 122,000 jobs in the last two years means tens of thousands fewer opportunities for young people to get their first step on the career ladder.
She attributed these losses to the tidal wave of employment costs
faced by retailers, emphasizing the £6.5 billion increase in costs due to National Insurance Contributions and National Living Wage rises. Dickinson also mentioned the industry’s efforts to support young people through the ‘Opening Shift’ initiative, which has pledged over 11,000 work experience places.
The retail sector aims to create 100,000 job opportunities for young individuals but calls for government policies that facilitate job creation. Dickinson suggested raising the NICs threshold to £6,000 as a measure to help retailers invest and hire, ultimately providing more opportunities for young people to enter the job market.
