Retail jobs fall at record levels as internet sales touch record highs, says CBI

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Retail sales volumes and orders both fell in the year to February, with the pace of decline easing slightly on the previous month, but companies continue to cut jobs.

The latest Confederation of British Industry (CBI) survey also reported record internet sales growth since 2009, with another top performance expected in the year to March.

Among retailers, only grocers saw any growth in volumes in the year to February, with non-store sales flat and other retail sectors reporting sharp declines.

The sector anticipates an even steeper fall in sales and orders for March, but sentiment for the quarter ahead stabilised, having fallen sharply in November.

Employment in the retail sector in the year to February tumbled 49%, a rate last seen in August 2009, when it dropped 48% amid the global financial crisis.

Dire times for employment across the country

The survey, conducted on 140 firms, coincided with the release of the latest employment data by the Office for National Statistics (ONS).

In the three months to December, the number of people out of work rose by 454,000 year-on-year to 1.74mln – the biggest annual increase since 2009.

The unemployment rate was 5.1%, up 1.3% in a year and 0.4% in a quarter.

Since the start of the pandemic, 726,000 people across the UK were taken off payroll, of which 58% were younger than 25.

Conversely, median monthly pay increased by 5% in December 2020 compared with the same period of the previous year.

The new figures showed that the jobs market stabilised towards the end of 2020, after redundancies spiked in the summer as businesses anticipated the furlough scheme was going to end.

Government wage support was later extended and companies are hoping Rishi Sunak will keep it as part of the new budget announced next week.

Unemployment rate to increase

Economists at ING Economics said an extension beyond the end of April “seems inevitable”, while we may also see further support for the hardest-hit sectors and incentives for employers bringing back staff from furlough.

“But whichever way an extension is structured, there will inevitably be some jobs that are no longer viable as a result of the pandemic,” they commented.

“The latest weekly jobs data indicates there are just shy of a million workers who have been ‘temporarily away from their job’ for at least three months, a rough proxy for those who either work in sectors that have never reopened, or whose jobs aren’t likely to come back.”

“We suspect that the unemployment rate will rise to around 6-6.5% through the middle of the year, and potentially higher if wage support is removed fairly abruptly in the second quarter.”

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