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Retail employment falls 2.5% as business rates force companies to cut costs

The number of full time retail jobs fell by 2.5% year-on-year in the second quarter of 2014, as property costs and business rates force companies to cut back elsewhere, according to the British Retail Consortium (BRC).

Non-food stores have led the decline over the past two years, though jobs in the grocery sector grew, the BRC-Bond Dickinson Retail Employment Monitor found.

However, the average number of staff per store fell to its lowest level since monitor started in 2009, which it said indicated a cutback in the number of hours worked and a growing preference for smaller format stores. The report did not provide exact figures.

Two-thirds of retailers intend to keep their staffing levels the same in the next three months - down from 80% in the same period last year - while 21% plan to take on more staff, up from 16%.

Only 4% intend to cut the number of staff they employ, the same proportion as last year. The number of redundancies in the sector “remains low”.

The BRC interpreted these figures as the consequence of rising costs elsewhere, particularly business rates.

Director general Helen Dickinson said: “The increasing upward pressure of business rates in recent years has meant that retailers have had less and less control over the cost of their property. This in turn has seen retailers ensuring that their workforce is as productive as possible and deployed across their stores in the most efficient manner.

“Retailers are well practised at keeping their costs under control, however, they will only be able to grow and create more jobs if the costs imposed by others, government in particular, are similarly carefully managed.”

Christina Tolvas-Vincent, head of retail employment at business law firm Bond Dickinson, added: “Any amendments to business rates would allow for fundamental reforms providing retailers with a greater opportunity to focus on key areas of growth such as employment.”

Separate data from the Office for National Statistics showed the overall rate of employment in the UK hit a 40-year high in the the months to May, with 73.1% of working age people in jobs.

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