As retailing employment is not concentrated in a particular region or locality, it is seldom acknowledged as being a key employer.  However, the retail sector accounts for more than 10% of jobs in England and Tesco is the UK’s second-largest employer after the National Health Service.

Retail is a fast moving and highly competitive sector where customer demands are constantly changing and intensifying.  Globalisation, new technologies, demographic shifts and changing lifestyles mean that retail must constantly re-invent itself to stay ahead.

Retail is a major engine of employment growth in the economy and between 1996 and 2001 created an average of 100,000 new jobs per year.

Over half of jobs in retail are part-time.  Self-employment in the sector is low and declining.

In 2002 there were 2,777,000 people employed in the retail sector with this figure predicated to rise to 2,869,000 in 2005, and continued growth forecast through to 2012.

Over a quarter of a million new jobs are expected in the sector through to 2012.  However, replacement demand (i.e. the need for new entrants to replace those leaving the sector) is predicted to be five times this figure, with sales and customer service occupations alone needing almost half a million people to replace those leaving the sector.

Sources: Working Futures 2004, Skills in England 2003, Harris and Church 2002 and Skillsmart 2002

The biggest cause of skills gaps in retailing is the failure to train and develop staff, which is cited as a major reason why the sector suffers such a high rate of staff turnover (the proportion of employees who have left the firm in the last twelve months). Traditionally, employers in retailing have tended to regard a high level of staff turnover as a natural characteristic of the sector. However, as the quality of customer service is becoming increasingly important, and firms compete less on product pricing, issues regarding recruitment and retention are increasing in importance.  The sector needs to reduce the high levels of staff turnover, which is highest among sales assistant and retail cashiers.  This is particularly worrying, given that employers have recognised that these groups of employees are increasingly important to a firm’s success. 

The image of the sector as one that does not provide a good career structure (possibly because a high proportion of the work is part-time) is also putting off potential employees.  Retail is in competition for workers with these skills from employers in hotels and catering (and other tourism-related sectors), financial services and health.

Sources: Skills in England 2003 and Harris and Church 2002

For further information see Occupations and the Regional dimension.

Source: Harris and Church 2002, page 91. Data derived from Employers Skills Survey 2001.

Improvements in IT are expected to have further influence on the sector as they will allow retailers to gather and analyse more data about their customers, and will allow consumers more easily to find information about suppliers, products and prices.  Innovations in IT have already helped retailers in targeted marketing, thereby bringing about increases in output.  E-commerce and the internet are expected to help the sector further in exploiting new opportunities and providing access to consumers in new as well as existing markets.  This includes increasing sales on-line and through call centres rather than in shops.

Growth in retailing in recent years has been driven by high consumer confidence, sustained employment growth, growth in real earnings and low interest rates.  Changes in any of these drivers will affect future employment trends in the sector.

Shops are increasingly open for long hours and the task of managing both shops and the associated workforce is becoming increasingly complex.  There is also constant pressure to reduce costs and prices.

The sector is at the forefront in developing employment policies such as flexible working, workplace diversity and the employment of older workers.

The environmental agenda and increased interest in ethical trading issues are placing new demands on managers and staff.

Source: Skills in England 2003 and Skillsmart 2002

Skillsmart’s aims to:

• reduce skills gaps within the sector
• improve productivity, business and public service performance
• increase the opportunities to boost the skills of everyone in the sector workforce while ensuring equality of opportunity for all
• improve the learning supply
• promote and raise the profile of employment and career opportunities within retailing
• devise and implement activities to increase participation and investment in learning by employers and individuals within the sector
• assemble, maintain and disseminate information on the changing skills needs within the sector
• improve learning opportunities for existing and potential members of the workforce to develop their skills to meet the needs of the sector

Source: Skillsmart 2002