February 11th 2025.
Tesco, along with other major retailers, has issued a warning about the future of the industry, predicting that nearly half-a-million workers on the shop floor could lose their jobs over the next three years. This includes employees from Tesco, Sainsbury's, M&S, Asda, Primark, and B&Q. The group has expressed concerns about the increasing costs and regulations facing the retail sector, which they refer to as a "perfect storm."
According to the Retail Jobs Alliance, which represents a third of all retail workers in the UK, one in ten shop floor employees could be at risk of losing their jobs. This is due to the government's plans to raise business rates for larger shops. In fact, the recent changes to business rates, announced in Labour's first Autumn Budget, have already resulted in a decrease in tax relief from 75% to 40% this April, with further increases expected in 2026.
This potential tax blow could have a devastating impact on some of the UK's most popular stores, according to the retailers. Rami Baitieh, the chief executive of Morrisons, has also expressed concerns about rising costs and taxes, urging the government to reconsider its plans and protect all shops from a potential rates hike that could have a significant impact on jobs and the high street.
The group has also highlighted the additional burden of a higher national insurance bill and a new recycling tax, which they believe could further endanger jobs in the retail sector. According to the British Retail Consortium, businesses could face a tax bill that is £4.5 billion higher than in previous years, with £2 billion of this coming from a new packaging levy and £2.33 billion from the rise in national insurance contributions.
These concerns come at a time when major supermarkets have already been forced to make significant job cuts. Just last month, Tesco announced the lay-off of 400 employees in an effort to "simplify" their operations. Sainsbury's has also revealed over 300 job losses as they try to cope with rising costs.
In response to these concerns, a spokesperson for the Treasury has stated that they are focused on stimulating economic growth and increasing the disposable income of working people. They have also emphasized their efforts to level the playing field for high street businesses by permanently cutting business rates and removing the cap for over 280,000 retail, hospitality, and leisure properties, while also capping corporation tax.
In summary, the future of the retail industry in the UK looks uncertain, with the possibility of hundreds of thousands of jobs being lost in the next few years. Retailers are calling on the government to reconsider their plans for higher taxes and regulations, in order to protect jobs and support the growth of the industry.
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