Store Closures and Job Cuts Means More Suffering for the Retail Sector

With the price of petrol beginning to slowly increase and the economy appearing to overcome the recession, we thought we were back in business., we thought we were overcoming the recession and back in business. However, for many retailers, this has not been the case.

According to the Office for National Statistics (ONS), ‘the number of people unemployed fell by 88,000 in three months to April taking it up to 2.43 million people – the largest drop since summer 2000.’

The ONS Labour market statistics continues to say that: ‘The number of employees and self-employed people working part-time because they could not find a full-time job increased by 80,000 on the quarter to reach 1.25 million, the highest figure since comparable records began in 1992.’

Retail is the largest private sector employer with a third of the workforce being under 25. This cut in retail jobs is going to have a long downturn effect on the younger public who already struggle for work.

Lloyds banking is one organisation implementing cuts. They plan to shed 15,000 jobs, equivalent to 14% of the workforce due to a strategic review that targets £1.5bn in annual savings by 2014. The new Chief Executive for Lloyds bank, Antonio Horta-Osorio says: “Our aim is to become the best bank for customers.”

HMV,one of the leading music and games retailers, has recently struggled due to the growth in games and cd sales in supermarkets and online. They almost faced administration, but luckily escaped after securing a two year £220 million refinancing deal with its tenders taking a 5% stake in the firm. The pressure had been increasing on HMV to restructure after they had been issued three profit warnings and last month announced the sale of Waterstones bookshops to the Russian billionaire Alexander Mamut for £53m. There is however no evidence of job cuts as yet but with this new management, there may be a possibility of cuts being on the cards.

TJ Hughes, an organisation founded in Liverpool, announced that jobs were at risk and its large department store in Bradford is due to close down. The company intends to appoint an administrator soon, which may result in 4,000 jobs being put at risk throughout the country.

Thorntons, renowned for its high quality chocolate luxuries, have announced plan to close up to 180 stores across the country, which means 10,000 people could lose their jobs. Thorntons hope to focus on internet sales, as they feel this would be more beneficial and have a bigger scope for growth financially rather than through the stores.

Jane Norman, a woman’s clothing fashion retailer suffering from the after effects of the recession, has recently shown signs of recovering from near bankruptcy by selling 33 of their stores, along with all their stock, to Edinburgh Woollen Mill. However consequently, Jane Norman has had to make 390 redundancies, with a further 740 employees at risk.

Not only is this change being implemented in the Retail sector, the Public sector are also suffering. The new Government changes in policies and the significant cuts throughout the year have meant job cuts. More than 50,000 jobs will or have already disappeared from the NHS. Up to 24,000 posts from hospitals; 10,000 from primary care trusts and 6,000 from mental health trusts, according to the survey by the union funded website – ‘false economy.’

Although Retailers are facing a difficult time, there is still hope for the sector and the British jobs market. The British Retail Consortium Online state that: ‘the number of retail outlets have grown by 5.3%…food retailers are the most confident about investing and creating jobs, especially Sainsbury’s, the Co-op and Waitrose, who all plan for major expansions and store openings in 2011.’

John Lewis plans to open a number of new home stores later this year which will create ample job opportunities for the public. However, the British Retail Consortium online does state that the outlook for the rest of the year will remain tough for retailers.

The BRC statistics state that 63% of retailers are determined to keep their staffing levels the same in the next quarter; the remaining 24% of retailers plan to reduce their workforce due to financial cuts. Statistics show that, in that last year, only 8% of retailers expected to reduce their workforce. (brc online)

In a climate of high interest rests, increased inflation and endless government cuts, the future for the retail sector and its jobs is not promising.


Post time: 08-30-2017