Retail job cuts worst since 2009 financial crisis

Retail employment fell at the fastest rate since February 2009 in the year to August, with an even sharper decline anticipated in the year to September, according to a survey by the CBI.

Its latest monthly Distributive Trades Survey – which featured 63 retailers among its 128 respondents – also showed a slight fall in retail sales on a year ago, which comes after broadly flat sales in the year to July, while a faster fall is expected next month. The decline was broad-based across sectors, with only grocers, furniture & carpets, non-store and ‘other’ goods sales seeing growth.

A special question asked this month found retail sales were, on average, 27% lower than in ‘normal’ non-pandemic conditions, but this represents a significant improvement on the last time this question was asked in June (-79%). Other survey findings included a fall in orders for the sixteenth consecutive month, while stock levels in relation to expected sales eased to their lowest since March.

Alpesh Paleja, CBI Lead Economist, said: “The furlough scheme has proved effective at insulating workers and businesses in some of the worst-hit sectors during the pandemic, but these findings reinforce fears that many job losses have been delayed rather than avoided.

“The latest survey shows that trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning. Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.

“As a result, further support may well be needed for the retail sector if demand continues to disappoint. Extending business rates relief will go a long way towards alleviating pressure on retailers’ cash flow.”

Despite the gloomy data, retailers expect a moderate improvement in the business situation in the coming quarter. Meanwhile, wholesalers saw sales fall for a fifth consecutive month, but do anticipate an easing in the decline in September. And motor traders saw growth in sales pick up further from last month, and another rise next month as well.

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