The recent hike in National Insurance Contributions and National Living Wage is significantly raising the employment costs in retail, especially for entry-level and part-time jobs, by more than 10%. With anticipated additional increases due to new packaging taxes, the total annual cost to the retail sector could exceed £7bn. The stringent fiscal measures threaten the existing 1.5 million part-time retail posts, with projections suggesting a potential loss of over 160,000 jobs in this sector. Slim profit margins exacerbate the sustainability challenges retailers face amid these changes.
The cost of employing people into entry-level jobs leapt by over 10% for retailers, driven by rises in National Insurance Contributions and National Living Wage.
Changes to employer NICs and higher National Living Wage will cost the retail industry over £5bn annually, rising to £7bn with the impending packaging tax.
Part-time jobs are vital for easing people back into the workforce, yet costs from tax changes could lead to a reduction of 160,000 part-time roles.
Retail margins are thin at 2-4%, and the added costs from NICs and wages could threaten the viability of many retail businesses.
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