Retail Reality Check: Prices Rise, Jobs Shrink
In a recent CBI survey, the UK retail world is making a not-so‑small shift: price hikes are on the menu while job cuts are the headline act. The sector’s morale has slid to its lowest level in five years, signalling a rough patch ahead.
What the Numbers Tell Us
- Employment is sliding: Across shops, the workforce saw a drop of -15% by May, with a steeper fall expected in June.
- Retail sales are down: In May, sales dipped -27% versus last year, and the forecast for June is even flatter.
- Prices go up: Inflated retail prices rose 35% year‑to‑date, still below the long‑term average, but a sharp uptick of 57% is on the horizon.
- Big budget moves: Rachel Reeves’ Autumn Budget raised employer NICs and the National Living Wage, adding a heavy cost to keeping staff.
The Bottom Line for Retailers
Retailers are tightening belts: they plan to slash investment in the next 12 months and anticipate a 47% reduction compared with the prior year. “We’re burning more cash on inventory than we’re pulling in, so better tighten the purse strings,” said Ben Jones, CBI’s Lead Economist.
Why The Mood Is So Low
The survey highlights two sobering trends:
- Unsteady consumer demand – the “seasonal slump” feels worse than a rainy weekend in the city.
- Falling job numbers and heavier payroll taxes – the overhead is a real sting.
Some Good News
Online sales are a silver lining, holding steadier than brick‑and‑mortar. If shops can sharpen their digital edge, the tide might just turn.
Meanwhile, the upcoming Spending Review offers a chance to light the spark. By tweaking business rates, simplifying apprenticeships, or pushing forward the Made Smarter Programme, the government could help retailers revamp their strategy and soften the blow.
Quick Takeaway
Retail’s going through a rough patch. Prices go up, jobs pull back, and balanced sentiment is taking a dip. Time for retailers to get clever—online growth, smarter spending, and a bit of government pro‑growth help could be the lifeline they desperately need.
