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Hot Sector Spotlight: Retail

Published 29th Sep 2022

With the current uncertainty around the UK economy and a recession on the horizon, retail employers and candidates alike are understandably feeling a little on edge around the future of the sector. 

The Guardian has reported that the British economy may already be heading towards a recession after a slump in retail sales in August 2022, which triggered heavy selling of the pound on international money markets, taking it to a 37-year low against the dollar.

The Office for National Statistics stated that the fall in sales wasn’t specific to one particular sector, with petrol stations, supermarkets, clothing and furniture stores all experiencing a drop in sales figures. 

However, the overall outlook isn’t entirely negative – there are numerous factors to be considered in regards to the UK retail sector as it is now, in comparison to pre-pandemic statistics.

Online retailers continue to thrive

Retailers without a store presence – predominantly online retailers – are still 24.4% above their February 2020 levels, despite sales falling by 2.6% in August 2022. 

In addition to this, UK online retail sales still remain significantly above pre-Covid levels; they are currently at 25.7% as of August 2022, in comparison to 19.8% in February 2020.

So, what does this mean for those currently working in the retail sector?

What retailers can do to prepare for the pending economic downturn

Despite news sources telling us that the outlook is bleak, there is a lot to be learnt from the current state of the market and the direction in which it is heading. 

Although UK citizens are being more mindful of their spending due to the increased cost of living, this generally tends to be weighted towards in-store shopping as opposed to online. The vast majority of UK retailers also have an existing online presence, but investment may be being reallocated towards further digitalisation going forward in order to keep up with buyer trends.

For example, if there are still restrictions with online stock in comparison to in-store stock, or delivery options being restricted from certain UK retailers, this may need to be revised to further online spend and accommodate those shopping online.

And that’s not where the good news for retailers ends, you’ll be pleased to know!

The mini-budget has good news for the UK retail sector

The UK government announced on 23rd September, in what has been coined the ‘mini-budget’, that not only will they be bringing back VAT-free shopping for overseas tourists coming to Britain, but that it would be a much-improved system than the one abolished just over 12 months ago.

The UK had seen a drop in the number of non-EU shoppers due to tourists favouring cities like Paris and Milan, where tax-free shopping was available. The aim of bringing back VAT-free shopping to the UK is to entice European tourists back to Britain, as we will be the only country in Europe where they can claim back the VAT on their purchases.

Chancellor Kwasi Kwarteng stated: 

“Britain welcomes millions of tourists every year, and I want our high streets and airports, our ports and our shopping centres, to feel the economic benefit. So we have decided to introduce VAT-free shopping for overseas visitors. We will replace the old paper-based system with a modern, digital one. And this will be in place as soon as possible. This is a priority for our great British retailers – so it is our priority too.”

UK retailers will not be culling all recruitment

Again, despite many dreary news stories focusing on retailers pushing the breaks on their recruitment efforts, these statistics tend to be weighted towards in-store workers. Many organisations are continuing to invest in their technology and marketing departments as a result of the digital retail increase.

In addition to this, a variety of retailers in the north west of England have recently made a number of senior appointments. Pets at Home has appointed Lisa Miao to succeed David Robinson as COO, and Shop Direct Finance Company Limited and Shop Direct Ireland, subsidiaries of The Very Group, have appointed Tim Franklin as chair.

Although the overall decline in retail jobs has been quite drastic over the last 5 years, this does not mean that the sector as a whole is going to disappear. It seems to be a result of the combination between the rising cost of living impacting spending, and shoppers opting for those with a seamless online shopping experience. 

It also comes as no surprise that Aldi is also now listed as one of the ‘Big 4’ supermarkets in the UK after overtaking Morrisons. It was inevitable that more people would move towards discount retailers such as Aldi and Lidl with the cost of living crisis, as switching to non-brand products to save money has been on the rise in recent years. As a result, many supermarkets are continuing to expand and open new in-person stores in various locations throughout the UK, including Aldi and Lidl, which will inevitably result in continuous hiring.

Looking for your next challenge in the retail sector? 

McCarthy Recruitment works with some of the biggest and most well-known names in the UK retail sector who are currently on the lookout for talented and experienced individuals to join their teams. 

Browse our latest UK retail jobs, or contact our dedicated retail recruitment team on enquiries@mccarthyrecruitment.com or 0161 828 8726 who will tell you more about the latest opportunities available. 

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