More retail job losses are looming as businesses grapple with rising employment costs, the BRC has warned.
Its latest survey of chief finance officers found employment costs were among their biggest fears amid increasing pessimism.
More than two-thirds (69%) described themselves as ‘pessimistic’ or ‘very pessimistic’, up from 56% in July 2025, while 14% were ‘optimistic’, an increase from 11%.
Meanwhile, 84% ranked labour and employment costs in their top three concerns, shooting up from 21% last July. Other significant risks to businesses included falling demand (77%), rising input costs (39%), and growing tax and regulatory burdens (29%).
A majority (61%) planned to reduce staffing hours or overtime, and 45% said they would need to freeze recruitment. More than half (55%) planned to reduce head office headcount and 42% planned to do so in stores. Finance chiefs planned to make up for the cuts by ‘driving higher productivity’ (68%) and investing in automation (61%).
“The economy is expected to remain fragile, with weak wage growth, unemployment rising, and low consumer confidence all pointing towards falling demand,” said BRC CEO Helen Dickinson.
“At the same time, businesses face sharply higher costs, from rising input prices and wage bills to new burdens created by government policy.
“We all want more high-quality, well-paid jobs. But retail has already lost 250,000 roles in the past five years, and youth unemployment is climbing fast.”
The BRC said concerns had intensified since the Employment Rights Act became law in January, with CFOs fearful over new rights of access to workplaces for trade unions and a requirement to offer guaranteed-hours contracts.
It said retail employment costs had risen by £5bn in 2025 thanks to increases in employer National Insurance contributions and the national living wage. The cost of employing a full-time entry-level worker rose by 10%, while for a part-time worker it rose by over 13%, according to BRC calculations. At the same time, youth unemployment had risen to 15.9%, with 730,000 under-24s not able to find work, the trade body noted.
“The Employment Rights Act is the biggest shake-up of employment rules in a generation, and how it is delivered will make or break job opportunities,” said Dickinson.
“Done well, the reforms can raise standards while supporting flexible and entry-level roles that are vital for people whose lives don’t fit a fixed nine-to-five pattern.
“If the government fails to consider business needs on policies including guaranteed hours and union rights, they will add complexity and reduce flexibility, ultimately stripping away entry-level and part-time opportunities at precisely the moment the country needs them most.”
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