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UK retailers cutting jobs at fastest rate since 2009, CBI says

Britain’s beleaguered retailers cut jobs at the fastest rate for more than a decade over the last 12 months, as the pandemic accelerated the longstanding decline of the high street.

Despite official figures last week that showed some signs of recovery as lockdown restrictions eased, a gloomy CBI report on Tuesday showed the level of staff losses in the year to August were the highest since February 2009, with fears of worse to come.

The CBI’s monthly distributive trades survey found that more than half of retailers said they expected to reduce the number of employees in the next three months as the pandemic continued to take a toll on consumer confidence.

Quick guide

UK retail and hospitality job cuts on back of Covid-19 crisis

Marks & Spencer – 7,000 jobs
18 August: Food, clothing and homewares retailer cuts jobs in central support centre, regional management and stores.

M&Co – 400 jobs
5 August: M&Co, the Renfrewshire-based clothing retailer, formerly known as Mackays, will close 47 of 215 stores.

WH Smith – 1,500 jobs
5 August: The chain, which sells products ranging from sandwiches to stationery, will cut jobs mainly in UK railway stations and airports. 

Pizza Express – 1,100 jobs
4 August: The restaurant chain plans the closure of 70 restaurants as part of a rescue restructure deal.

Dixons Carphone – 800 jobs
4 August: Electronics retailer Dixons Carphone is cutting 800 managers in its stores as it continues to reduce costs.

DW Sports – 1,700 jobs at risk
3 August: DW Sports fell into administration, closing its retail website immediately and risking the closure of its 150 gyms and shops.

Marks & Spencer – 950 jobs
20 July: The high street stalwart cuts management jobs in stores as well as head office roles related to property and store operations.

Ted Baker – 500 jobs
19 July: About 200 roles to go at the fashion retailer’s London headquarters, the Ugly Brown Building, and the remainder at stores.

Azzurri – 1,200 jobs
17 July: The owner of the Ask Italian and Zizzi pizza chains closes 75 restaurants and makes its Pod lunch business delivery only

Burberry – 500 jobs worldwide
15 July: Total includes 150 posts in UK head offices as luxury brand tries to slash costs by £55m after a slump in sales during the pandemic.

Boots – 4,000 jobs
9 July: Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.

John Lewis – 1,300 jobs
9 July: John Lewis announced that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.

Celtic Manor – 450 jobs
9 July: Bosses at the Celtic Collection in Newport, which staged golf’s Ryder Cup in 2010 and the 2014 Nato Conference, said 450 of its 995 workers will lose their jobs.

Pret a Manger – 1,000 jobs
6 July: Pret a Manger is to permanently close 30 branches and could cut at least 1,000 jobs after suffering “significant operating losses” as a result of the Covid-19 lockdown

Casual Dining Group – 1,900 jobs
2 July: The owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains collapsed into administration, with the immediate loss of 1,900 jobs. The company said multiple offers were on the table for parts of the business but buyers did not want to acquire all the existing sites and 91 of its 250 outlets would remain permanently closed.

Arcadia – 500 jobs
1 July: Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said in July 500 head office jobs out of 2,500 would go in the coming weeks.

SSP Group – 5,000 jobs
1 July: The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, about half of its workforce, with cuts at its head office and across its UK operations after the pandemic stalled domestic and international travel.

Harrods – 700 jobs
1 July: The department store group is cutting one in seven of its 4,800 employees because of the “ongoing impacts” of the pandemic.

Harveys – 240 jobs
30 June: Administrators made 240 redundancies at the furniture chain Harveys, with more than 1,300 jobs at risk if a buyer cannot be found.

TM Lewin – 600 jobs
30 June: Shirtmaker TM Lewin closed all 66 of its outlets permanently, with the loss of about 600 jobs.

Monsoon Accessorize – 545 jobs
11 June: The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal in which 35 stores closed permanently and 545 jobs were lost.

Mulberry – 470 jobs
8 June: The luxury fashion and accessories brand is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

The Restaurant Group – 3,000 jobs
3 June: The owner of dining chains such as Wagamama and Frankie & Benny’s has closed most branches of Chiquito and all 11 of its Food & Fuel pubs, with another 120 restaurants to close permanently. Total job losses could reach 3,000.

Clarks – 900 jobs
21 May: Clarks plans to cut 900 office jobs worldwide as it grapples with the growth of online shoe shopping as well as the pandemic.

Oasis and Warehouse – 1,800 jobs
30 April: The fashion brands were bought out of administration by the restructuring firm Hilco in April, with all of their stores permanently closed and 1,800 jobs lost.

Cath Kidston – 900 jobs
21 April: More than 900 jobs were cut immediately at the retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores.

Debenhams – 4,000 jobs
9 April: At least 4,000 jobs will be lost at Debenhams in its head office and closed stores after its collapse into administration in April, for the second time in a year.

Laura Ashley – 2,700 jobs
17 March: Laura Ashley collapsed into administration, with 2,700 job losses, and said rescue talks had been thwarted by the pandemic.

Last week, Marks & Spencer took the total number of job cuts it has announced since March to 7,950, more than 10% of its workforce, one of a long line of retailers that have struggled to cope with the decline in footfall since the lockdown was imposed in March. The department store group John Lewis has announced 1,300 jobs will go while Boots is cutting 4,000.

Shops in airports and train stations, many of them still closed, have also been earmarked for job cuts. WHSmith was among the retailers to say they feared only a small proportion of outlets would reopen when it outlined plans to cut 1,500 staff.

A gradual reopening since May has resulted in a return to pre-crisis levels of retail sales, according to official figures, but footfall has remained at about two-thirds of what it was this time last year.

Any bounce-back during the summer has mostly come from online sales, which have grabbed a bigger slice of retail spending since most shops were forced to close. Tesco announced on Monday it would make permanent 16,000 temporary jobs to cope with the surge in online grocery trade.

The CBI survey, which provides the most recent snapshot of trading, showed a slight fall in retail sales on a year ago, after a recovery to parity with last year in the July survey. The decline was broadbased across sectors, with only grocers, furniture and carpets, non-store and “other” goods sales achieving growth.

Retail jobs losses have accelerated since May, when the chancellor, Rishi Sunak, confirmed the furlough scheme would end in October.

The balance of employers saying they would reduce their headcount was -20 in May before weakening to -45 in August and -52 for the three months to November.

Alpesh Paleja, the CBI’s 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.”

Howard Archer, chief economic adviser to the EY Item Club, said official figures would show a substantial rebound in retail sales and the economy more broadly in the third quarter. The warm weather and a backlog of work dating to before the lockdown had generated a surge in activity, he said.

Nevertheless, consumers’ incomes remained under pressure after a steep fall in employment, “while others will be concerned that they may still end up losing their job once the furlough scheme ends in October”, Archer added.

He has forecast the unemployment rate would increase to about 8.5% by the end of the year. The rate was 3.9% for the three months to June.

“The weaker-than-expected August CBI survey is a reminder that there is considerable uncertainty as to just how willing and able consumers will be to spend beyond the third quarter. Persistent consumer caution is seen as a significant risk that could limit the UK recovery,” Archer said.

Read the original article at The Guardian

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