Retail job cuts worst since 2009
The CBI’s latest monthly Distributive Trades Survey featured 63 retailers among its 128 respondents.
It showed a slight fall in retail sales on a year ago, which comes after broadly flat sales in the year to July, while a faster fall is expected next month.
The decline was broad-based across sectors, with only grocers, furniture and carpets, non-store and ‘other’ goods sales seeing growth.
A special question asked this month found retail sales were, on average, 27% lower than in ‘normal’ conditions (i.e. in the absence of the pandemic). This represents a significant improvement on the last time this question was asked in June when the figure was 79% lower than normal.
Other survey findings included a fall in orders for the 16th consecutive month, while stock levels in relation to expected sales eased to their lowest since March.
Alpesh Paleja, CBI lead economist, said: “The furlough scheme has proved effective at insulating workers and businesses in some of the worst-hit sectors during the pandemic, but these findings reinforce fears that many job losses have been delayed rather that avoided.
“Indeed, the latest survey shows that trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning. Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.
“As a result, further support may well be needed for the retail sector if demand continues to disappoint. Extending business rates relief will go a long way towards alleviating pressure on retailers’ cash flow.”
Nearly 730,000 people lost their jobs during lockdown, with retail heavily affected. M&S is to cut 7,000 jobs, John Lewis plans to close a number of stores, Harrods intends to shed 700 jobs, and TM Lewin has closed all its stores.