Job losses in retail – how and where will new jobs be created?

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By Dr Amna Khan, senior lecturer in retailing at Manchester Metropolitan University

According to new figures from the Centre for Retail Research, the UK is forecast to see 200,000 job losses in retail in 2021.

High Street and retail jobs losses have been in the news for over a decade, along with government initiatives to transform and save our high streets, the jobs they provide and the communities they keep alive.

The High Street has always evolved and changed, but the COVID-19 pandemic has exponentially accelerated the change in the retailing landscape over a very short space of time.

The UK has the most advanced e-commerce market in Europe and the pandemic has contributed to an increase in investment by retailers trying to compensate for the temporary non-essential store closures.

This mass shift to online shopping has captured consumers’ attention as an alternative to the traditional in-store experience and has seen new and diverse audiences engaging with online retailing.

As a result, we have witnessed a surge in online retailing which accounted for more than 30% of total retail sales in the UK for the first time in 2020. As online retailing surges, the High Street and in-store retailers has been plagued with store closures, job losses and redundancies.

There were 177,000 job losses across the retailing sector in 2020 and the projection for 2021 is devastating, with a further 200,000 jobs expected to be lost.

My colleagues in the Institute of Place Management at Manchester Metropolitan University are looking at how the High Street can adapt to these changes and meet the needs of the communities in which they are based.

This month, stores owned by Debenhams and Arcadia are set to close their doors for good. The brands themselves are set to be bought by well-established online retailers, Boohoo and Asos, respectively.

These companies are both significant players in online fashion retailing with significant consumer bases that are loyal and engaged. One could ask, why wouldn’t they be, as in the UK 55% of the population shop online with the favourite item to buy being clothes.

But what do High Street store closures and the shift to online shopping mean for retail jobs? Can these jobs be repurposed with online retailers or is the future of in-store retailing going to be different?

Bricks and mortar – retailing staff

Firstly, it is important to recognise that the nature of online retailing requires fewer employees than in-store retailers. Boohoo currently employs around 3,000 staff and Asos around 4,000 so it is unlikely that the in-store jobs that have been lost will be replaced.

Online retailing is a different beast to retailing in-store. The infrastructure that supports online retailing is distinct, in that it relies on delivery and transportation to get the goods ordered online to the customer.

The surge in online retailing has resulted in huge demands being placed on the delivery network and the COVID-19 lockdowns temporarily stretch the system further.

As consumers shift their consumption demands to online platforms, the need for delivery network employees increases. This was witnessed when major supermarkets such as Tesco rapidly set up a network to support their online demand, which required employment of drivers and warehouse operatives.

This investment, which was initially temporary to respond to COVID-19, has been a testing ground for a permanent shift which has resulted in employment opportunities. For example, Tesco made 16,000 temporary staff permanent hires in August 2020 after the supermarket saw a huge increase in online sales as a result of the pandemic.

Delivery partners

Independent organisations have also embraced the digital shift by setting up online channels to ensure they can serve customers during lockdown restrictions, but also to ensure that their businesses have the capabilities to meet customers’ needs after the pandemic.

As an example, smaller independent stores at Streford Food Hall in Manchester now provide an online channel that delivers customer orders within a two-hour timeframe and the hiring of delivery staff is fundamental to servicing the demand.

Furthermore, data from online food delivery company Deliveroo shows that the company now has 11,500 UK restaurant partners, including 8,800 small and independents, and has also signed-up 16 new on-demand grocery partners in the past year, such as Aldi, Morrisons, Waitrose and Co-op.

This increase in delivery partners and subsequent demand has resulted in Deliveroo’s recruitment of 15,000 new delivery riders during the pandemic. Similarly, Iceland’s partnership with Uber Eats has created 3,000 delivery roles.

The demand from consumers has shifted, as has the need for resources. We are moving into an era where online retailing has become the preferred way to shop. Retailers will need to ensure their delivery systems reflect a seamless experience, not only in their deliveries but also in the returning of items.

As for bricks and mortar retailing, the High Street and in-store retailing will continue to evolve and change, as it always has. Consumers will always want shops, but not necessarily in the existing format.