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UK retail employment fell to a record low in Q1 2026, with the four-quarter average, dropping to 2.79 million jobs, according to the latest Office for National Statistics (ONS) figures.
The decline comes as the retail industry faces an additional £6.5 billion in employment costs over a 14-month period, driven by increases to employer National Insurance Contributions and the National Living Wage, according to the BRC.
Retail leaders have also warned that aspects of the Employment Rights Act, if implemented without sufficient flexibility, could make it harder for businesses to offer the entry-level and part-time roles that underpin much of the sector’s workforce.
The latest figures by the ONS show that retail employment in Q1 2026 was 66,000 fewer than a year earlier, and 398,000 fewer than in Q1 2016.
This puts the four-quarter average, which smooths out seasonal hiring fluctuations, as the lowest on record.
Using the same measure, in Q1 2026 there were 1.27 million full-time and 1.52 million part-time retail jobs. Full-time roles were down 163,000 on a decade ago, while part-time roles fell by 235,000 over the same period, a steeper decline that points to growing pressure on the flexible positions relied upon by students, parents and carers.
A graphic provided by the British Retail Consortium (BRC). The graphic uses the 4Q average to smooth out the seasonal variations in hiring. It shows that for Q1 2026 there were only 2.79 million retail jobs, the lowest on record.
In a recent letter coordinated by the British Retail Consortium, more than 80 retail CEOs said rising employment costs and additional regulatory burdens risk closing off opportunities for young people and reducing flexible roles across the industry.
Helen Dickinson, Chief Executive at the BRC, said the pressure on entry-level hiring carries wider consequences: “The number of young people not in education, employment, or training is set to reach 1.25 million over the next five years. Retail and its supply chain is almost a quarter of all youth employment.
“Flexible, entry-level roles that help people gain skills, confidence and experience are a vital route into work, but rising employment costs and additional regulatory burdens are choking off opportunities at a time when they’re needed most.”
Dickinson said the government must bring down the cost of employing young people and ensure employment reforms support entry-level recruitment. “Retailers stand ready to work with government to help more young people take that crucial first step on the career ladder,” she said.
The BRC has warned about retail labour costs for more than a year. In early 2025, the consortium warned that one in ten part-time retail jobs, up to 160,000 roles, could be at risk over three years as a result of Budget measures and regulatory changes.
Retail remains the UK’s largest private sector employer. The latest figures suggest the sector’s capacity to provide flexible, first-step jobs is contracting as concerns over youth employment grow.
Lord Simon Wolfson, Chief Executive of the retail group NEXT, has also warned of a “crisis in youth unemployment”, due to a drop in the number of opportunities for shop workers and entry-level jobs.