Press Release
Shop numbers drop - first time in at least three years
26 July 2012
For the first time since the survey began in October 2008 it showed a decline in the number of retail outlets, falling by 0.5% compared with the previous year – 88 fewer shops in the sample.
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Second Quarter 2012: April - June % change on a year ago |
|
|
Monthly % change on a year ago |
||
|
Employment: full-time equivalent |
Number of stores |
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Employment: full-time equivalent |
Number of stores |
|
|
1.8% |
-0.5% |
April |
1.4% |
-0.4% |
|
|
May |
2.1% |
-0.5% |
|||
|
June |
1.8% |
-0.5% |
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In the second quarter of 2012, retail employment, effectively total hours worked, rose by 1.8% compared with the same quarter in 2011, the equivalent of 12,648 more full-time jobs according to our sample.
The overall increase was driven entirely by food retailers with the fastest growth from part-time workers. In non-food retailing the total hours worked fell.
The proportion of retailers suggesting that they will decrease staffing levels over the next quarter has fallen to just 4% compared with 25% for the same period last year.
The BRC-Bond Pearce Retail Employment Monitor (REM) indicates that 83% of the sample will keep staffing levels unchanged, compared with 58% last year.
Stephen Robertson, British Retail Consortium Director General, said: "Retail as a whole is still where much-needed new jobs are coming from but, within that, it's food retailing that's providing more work. Big events like the Jubilee celebrations provided a limited boost to employment levels but underlying weakness in the economy and consumer confidence continue to hit sales and job numbers in non-food retailing.
"Overall retail sales growth across the first half of 2012 was no better than a year earlier and the first decline in store numbers among retailers in the survey since it started in October 2008 shows the worst-hit shops being shut as customers hold back spending. Supermarkets, continuing to open smaller-format stores, are masking the potential of a much sharper decline. Without them, total shop numbers would have fallen further.
"Even so, retailers' sentiment about the coming quarter has improved. A year ago a quarter said they would be cutting jobs. Now that's only four per cent. And, the relaxation of Sunday trading laws during the Olympics is expected to provide a boost to the number of hours worked over the coming months."
Christina Tolvas-Vincent, Head of Retail Employment at business law firm Bond Pearce, said: "At first glance, there are some positive messages here; rising employment which translates to more than 12,000 extra full time equivalent jobs and redundancy rates remaining very low.
"Serious concerns remain, however. The number of retail outlets is falling for the first time, reflecting the immense pressure on high street retailers in particular and for non-food retailers, employment levels are down. It is therefore encouraging to see the Government looking at creative ways to bring vacant high street properties back into use and also offering further help to pilot areas under the Portas project. Employment intentions have dramatically improved. With 83 per cent planning to keep staffing levels unchanged, compared with just 58 per cent last year, it looks like retailers are hoping for some light at the end of the tunnel. It has also been a summer of ups and downs so far with the Jubilee celebrations, the record amount of wet weather and now the build-up to the Olympics all having an impact on the industry. But the reality of the situation may be clouded as a result. It will be very interesting to see what the next quarter brings."
Labour Market Overview
The latest unemployment statistics from the Office for National Statistics (ONS) showed the number of unemployed people falling to a nine-month low of 2.58 million. The unemployment rate fell to 8.1% in the three months to May, down from 8.3% in the last quarter. This is the fourth consecutive month that unemployment has fallen.
The rise was driven by an increase in the number of full-time workers, unlike previous months, rising by 133,000, while the number of part-time workers rose by 48,000. There are some indications that the rise in employment was driven by jobs linked to the Olympics. The number of people employed rose 181,000 to just fewer than 30 million, the highest in almost four years. However, some economists have warned that the increase in temporary positions will have to be unwound later in the year, suggesting that the jobless total is likely to start rising over the coming months.
Average earnings rose 1.5 per cent year-on-year, up by a marginal 0.1 percentage points compared with the previous quarter, demonstrating that incomes are still being squeezed despite inflation falling to 2.4 per cent.
Retail Employment
The latest data from the REM showed that retail employment rose by 1.8% (fig. 1.) in June 2012 compared with the same period a year earlier. This is the equivalent of 13,170 more full-time equivalent (FTE) jobs according to our sample.
June's rise is the fastest since October 2010 when FTE jobs rose by 2.6%. This is now the seventh consecutive month of FTE growth, with the latest quarter demonstrating a significant pick-up in the number of hours worked. This quarter is likely to have benefitted from increased staffing levels during the Jubilee celebrations, while preparations for the Olympics are likely to have provided a boost to June's figures.
Grocery retailers in our sample, which covers over 75% of the market by turnover, continue to open more outlets and employ more people.
The rise in FTE employment was driven entirely by the grocery sector with the growth of part-time hours worked outpacing those of full-time workers. Although the number of stores in our sample actually declined for the first time since the inception of the Monitor, supermarkets continued to open new stores and employ more people. However, a decline in the average number of employees per store suggests that grocery retailers are opening smaller store formats and enhancing their convenience offering.
Non-food retailers continued to cut the number of hours worked by their employees. The fall in the number of hours worked was deeper for full-time employees with the latest quarter showing the fastest decline since the Monitor started. Part-time hours worked also declined compared with the same period in the previous year but didn't fall as sharply as full-time hours.
The Monitor measured a significant improvement in retailers' employment intentions during the second quarter of 2012 compared with the previous year. The vast majority (83%) indicated that they would be keeping staffing levels unchanged compared with the same time last year. Only 4% of retailers indicated that they intended to reduce staffing levels over the next three months compared with a quarter of retailers surveyed in the second quarter last year. While underlying labour market conditions remain challenging for many, last quarter's improvement in sentiment has carried forward into this quarter.
Retail Store Numbers
The number of retail outlets fell for the first time since the inception of the Monitor in October 2008. The number of stores declined by 0.5% in the second quarter of 2012 compared with the same period last year. This equated to 88 fewer stores in our sample.
It marks a significant shift from consistent annual growth in store numbers since the BRC started measuring data in this way. The underlying trend (Fig.3) shows a weakness in store openings over the last 12 months.
The fall in the number of stores is indicative of the challenges facing high streets with vacancy rates at historically high levels.
Redundancies
The latest figures show redundancy rates remaining at very low levels during the second quarter of 2012. Levels now appear to have been on a downward trajectory since the end of 2011.
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