Retailers are cutting jobs at the fastest pace for nearly three years after rain added to the gloom already enveloping the high street under Labour.
The number of people employed in the sector in the year to February fell at the sharpest rate since May 2023 – and firms expect even deeper cuts next month, figures from the Confederation of British Industry (CBI) showed.
Sales volumes fell ‘at a rapid pace’ amid ‘persistently weak demand’, extending a dismal run dating back to mid-2023 – and business conditions are expected to deteriorate further, the poll found.
Some firms reported ‘that the wet weather discouraged shoppers from visiting stores,’ said CBI lead economist Martin Sartorius.
With the rain keeping consumers indoors, online sales grew at the fastest pace since April 2021, but not enough to boost the overall index.
It comes as the high street reels from a succession of painful government policies including a raid on employer national insurance, botched business rates reform, a steep rise in the minimum wage and the introduction of a raft of new workers’ rights.
Some shoppers were discouraged by the wet weather
Sartorius said: ‘Soft demand conditions and elevated costs have continued to feed through to gloomy sentiment in the retail and broader distribution sector, prompting many firms to scale back investment plans and headcount.’
He said next week’s spring statement offered the Chancellor the chance to provide some relief for the embattled high street.
‘Firms will be looking for the Chancellor to set out how the government plans to mitigate the impact of rising employment costs… particularly given its vital role in providing first jobs for young people,’ he said.
The survey’s measure of sales volumes sank to minus 43, down from minus 17 in January and only just above December’s six-month low of minus 44.
And the CBI’s retail business optimism gauge edged up only marginally to minus 34 from November’s minus 35 reading, which was the lowest since the global financial crisis in 2008.
