Why are retailers facing staff shortages?

Why are retailers facing staff shortages?

Retail staff decrease

Retailers have now resumed trading as they seek to get business back on track following the forced closures of the pandemic. However, since their return, they now face a new challenge, staff shortages. Recent data shows that in the second quarter of 2021 the UK retail industry lost 89,000 jobs compared to the same period in 2020. Although retail sales have been strong over the past few months, the number of jobs in retail fell to around 3.015 million (latest figures from Office of National Statistics).

 

Why are retailers facing staff shortages?

It has been found that the decrease in the retail workforce is down to a number of factors. Firstly, the low footfall in city centres and shopping centres, secondly, the increasing number of vacant stores and finally being in direct competition with the hospitality sector for jobs. Vacancies in the retail sector reached over 1 million between June and August 2021, the first time this unwanted milestone has been reached since records began.

On the face of it, it is surprising that retailers are struggling to find new staff considering that many retail staff lost their jobs during the pandemic.  However, retailers are usually reliant on EU nationals to fill vacant retail roles and the combination of travel restrictions and the new Brexit rules explain why retailers are currently facing such staff shortages. Industry commentators are also suggesting that the sector has become less attractive to potential recruits due to a perceived lack of job security.

In combination, these factors are resulting in a very challenging employment market.

 

Retailers seek to improve employee retention

Unsurprisingly, research has found that the retail and hospitality sector were the highest recruiters over the past three months and the majority of candidates have been removed from the market.  Therefore, retailers will need to think creatively about their benefits packages to entice people in to the sector and retain current employees.

 

How can we help?

At Hawsons we have a dedicated team of retail, wholesale, and e-commerce accountants at our offices in Sheffield, Doncaster, and Northampton. Our specialist team offers a wide range of services which are tailored to meet your individual needs. Our understanding of the issues faced by the retail, wholesale and e-commerce sector means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.

Free initial meeting

Pete Wilmer, Corporate Finance Partner

Pete Wilmer

Partner, Sheffield

0114 266 7141

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Contactless Spend Limit Increased to £100

Introduction

On 15th October the contactless spending limit increased to £100. Although the limit has been increased, the retail industry has said that it could take months to implement this change before all shoppers can use the new payment threshold. The 15th October 2021 marks the day where the gradual introduction of the new limit began.

 

Why is the contactless spend limit increasing?

The Treasury and the City regulator, the Financial Conduct Authority (FCA), made the decision to increase the contactless spending limit. Chancellor Rishi Sunak said that increasing the contactless spending limit would increase convenience for shoppers and would help high street retailers after a difficult lockdown period.

Over the last five years, the frequency of contactless payments has continued to rise as the payment thresholds have gradually increased. The only exception was during the national lockdown where spending decreased across the board. This latest contactless spending increase has come because fewer consumers are now paying with banknotes and coins, in part, driven by people wishing to reduce person-to-person contact.

 

Is the new contactless limit safe from fraud?

The cumulative contactless payment cap was increased from £130 to £300 on the 15th of October. Therefore, you can now spend £300 via contactless payment before the pin number is requested.

Some have expressed concerns that this increased contactless limit will encourage more thieves to steal wallets, purses, and bags, etc. Professor Graham Farrell (Professor of crime science at the University of Leeds) has suggested using a tap and pin approach, where shoppers would tap their card and enter their pin without needing to insert the card into the machine. Professor Farrell believes that this approach would make the idea of theft less attractive.

However, the authorities counter that with data that has shown that there was no increase in crime when the last payment limit increase was implemented. In addition, an FCA spokesman said that there was no increase in fraud in other countries where contactless spending was increased to the equivalent of £100 or more.

 

How can we help?

At Hawsons we have a dedicated team of retail, wholesale, and E-commerce accountants at our offices in Sheffield, Doncaster, and Northampton.

Our specialist team offers a wide range of services that are tailored to meet your individual needs. Our understanding of the issues faced by the retail, wholesale, and e-commerce sector means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.

We can help in these areas through improving stock control, purchase re-ordering, and reconciliation procedures. For retailers, we have in-depth knowledge and experience of the sector from single sites to multi-channel retailers covering retail shops, e-commerce shops, and many other sites such as Amazon, eBay, Shopify, and Play.com.

Pete Wilmer, Corporate Finance Partner

Pete Wilmer

Partner, Sheffield

0114 266 7141

Free initial meeting

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UK’s independent stores record first rise in four years

UK’s independent stores record first rise in four years

Due to 5,251 chain stores closing during the first half of 2021. Many independent retail stores have decided to fill the gaps left resulting in the first rise in independent stores for the first time in four years.

A new total of 804 independent retail stores opened during the first half of 2021 according to data from the Local Data Company (LDC), including:

  • Barbers
  • Bakers
  • Cafes
  • Convenience stores
  • Fast-food outlets

The LDC said that independent stores were able to benefit from government support schemes, enabling them to remain open to take advantage of cheaper rent deals from landlords as many wanted to encourage tenants into their vacant premises quickly and mitigate rates liabilities. By the end of 2021, it is expected that an additional 10,549 stores will become vacant and landlords will be hoping that small business owners will step in to help fill these vacancies. Failing that, landlords may have to be prepared to consider redevelopment or conversion of their commercial properties for alternative purposes.

Approximately half of Topshop’s stores have been let to independent retailers when they exited the high street at the beginning of the year. Furthermore, it has been reported that independent retailers are benefitting from customers becoming increasingly concerned about sustainability, the origin of products, and supporting local businesses.

However, retailers are being warned that the true impact of the pandemic may not be felt until March 2022 when the moratorium on evictions is lifted on commercial properties.

 

How can we help?

Hawsons has a dedicated team of specialist retail, wholesale, and e-commerce accountants in Sheffield, Doncaster, and Northampton.

Our specialist team offers a wide range of services that are tailored to meet your individual needs. Our understanding of the issues faced by the retail, wholesale, and e-commerce sector means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.

Free initial meeting

Pete Wilmer, Corporate Finance Partner

Pete Wilmer

Corporate Finance Partner

0114 266 7141

[email protected]

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Hawsons advise on sale of specialist engineering firm

The Hawsons Corporate Finance team has advised the shareholders of Denley Hydraulics on their sale to specialist engineering group, SCX.

Denley Hydraulics is a specialist provider of bespoke electro-hydraulic systems to a variety of industries including aerospace, defence, marine, nuclear and renewable energy.  Through all phases of design, build and installation, Denley Hydraulics provides a complete solution.

SCX engineering group provides engineered solutions, to complex mechanical handling and lifting challenges for customers in the nuclear, defence, aviation, and architecture sectors. The company designed and built the retractable roof system at Wimbledon for their Centre Court and No 1 Court.

The two companies recently collaborated on the world’s first dividing retractable football pitch at the Tottenham Hotspur FC stadium.

Jon Nock of Denley Hydraulics commented, “the team at Hawsons Corporate Finance supported us every step of the way in making this transaction a success. Nothing was ever too much trouble and their advice has been excellent throughout”.

Hawsons Corporate Finance Partner Pete Wilmer said: ‘”We are delighted to have assisted Denley Hydraulics on the sale to the SCX engineering group.  The businesses have already demonstrated their ability to collaborate and deliver world-leading solutions and this deal will no doubt facilitate many more exciting projects for the enlarged group. We wish all involved every success.”

Free initial meeting

Pete Wilmer, Corporate Finance Partner

Pete Wilmer

Partner, Sheffield

0114 266 7141

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How has 2020 changed the retail sector?

How has 2020 changed the retail sector?

Introduction

2020 has been one of, if not the, toughest year’s for retail. With many non-essential retail stores forced to close during periods of the year, this led to consumer spending changes with many consumers starting to shop online or more locally. In this article, we summarise some of the changes 2020 has brought to the retail sector.

 

Independent shops see a sales increase

Despite the fact that the retail sector saw a sales decrease in 2020. Britain’s independent retailers saw a sales increase. The Covid-19 pandemic caused consumers to shop at their local high street instead of large city centres. Barclaycard data indicates that spending at independent food and drink stores increased by 28.6% in 2020 compared to 2019.

 

Department and clothing stores hard-hit

Whilst essential spending increased by 4.1% compared to 2019, non-essential retailers endured a tough year with non-essential spending decreasing by 11.3%. This affected department stores and clothing stores in particular. This data comes as no surprise since non-essential retail was forced to close for lengthy periods in 2020 and unfortunately, led to financial problems for some well-known retailers such as Debenhams and Arcadia.

 

DIY Spending increased

During 2020 we all spent more time in our homes than we typically would have leading to an increase in DIY and furniture spending as many people decided to make home improvements. DIY and home goods stores reported a spending increase of 9.8% for 2020. Whilst furniture retailers saw a 5.3% increase in spending.

 

Consumers treated themselves more during lockdown

UK consumers treated themselves and others more this year with a spending increase of 22.7% at florists, 9.8% on crafts and hobby, and 10.7% on vet and pet retail this year.

 

 

Which consumer trends are likely to last beyond the covid-19 pandemic?

Whilst the economic outlook remains uncertain, the acceleration of digital adoption that we have seen due to the pandemic this year is certainly going to have a significant and lasting effect on consumer trends/ behaviour. The retailers that adapt to digital adoption and consumer trends will most likely succeed and possibly come out of the pandemic stronger.

Customers are now using more card and contactless payments in stores to avoid/ reduce physical contact of cash. When the pandemic began in March the decision to increase the contactless spend limit to £45 was made and implemented on 1 April to reduce cash payments.

Are we heading towards a cashless society?

How can we help?

At Hawsons we have a dedicated team of specialist retail, wholesale, and E-commerce accountants at our offices in Sheffield, Doncaster, and Northampton. Our specialist team offers a wide range of services that are tailored to meet your individual needs. Our understanding of the issues faced by the retail, wholesale, and e-commerce sector means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.

 

Free initial meeting

Pete Wilmer, Corporate Finance Partner

Pete Wilmer

Corporate Finance Partner

0114 266 7141

More similar articles

Autumn Budget 2021

Autumn Budget 2021

Budget 2021 The Chancellor Rishi Sunak presented his third Budget on 27 October 2021. In his speech he set out the plans to "build back better" with ambitions to level up and reduce regional inequality. Main Budget proposals Tax measures include: a new temporary...

Why are retailers facing staff shortages?

Why are retailers facing staff shortages?

Retail staff decrease Retailers have now resumed trading as they seek to get business back on track following the forced closures of the pandemic. However, since their return, they now face a new challenge, staff shortages. Recent data shows that in the second quarter...

Contactless Spend Limit Increased to £100

Contactless Spend Limit Increased to £100

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You can find all of our latest retail sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

How can Small Local Retailers have a Successful Christmas?

How can Small Local Retailers have a Successful Christmas?

Perhaps unsurprisingly, recent figures have shown that retail footfall declined in November and was expected to fall by 62% over the six-week period leading up to 22 December.  This is clearly a very challenging period for the retail sector, especially for those small local retailers who do not have the budget to move online, and complete with larger retailers in their area. How can local, independent retailers have a successful Christmas period without exploring expensive digital avenues?

 

Use Local to your Advantage 

In 2020 consumers’ shopping habits have changed as consumers are now shopping at small local shops more than ever before. During the pandemic, consumers decided to shop in smaller local stores because they felt it was a ‘safer’ shopping experience. Furthermore, during challenging times consumers wanted to support small businesses in their local community.

If you are an independent local business make sure everyone in your community knows about it! There are multiple ways of doing this:

  • Create social media pages (Facebook, Twitter, etc) This is much quicker and less expensive than setting up a website.
  • Get involved in community events. This is a great way of spreading the word about your business.
  • Create a small leaflet and post it to houses in your local area.
  • In addition, if your products are locally sourced you should highlight this, locally made products can be more appealing to consumers than those that are sourced nationally or internationally.

 

Personalisation

One of the main reasons why consumers prefer independent local retailers is because of their personal experience. Make sure you go the extra mile to make your consumers happy, if they have a bad experience they will not return to your store. Customer loyalty is essential for the success of any small retailer and can lead to more word-of-mouth promotion.

There are a number of ways that you can make your business more personal.

  • Hire friendly staff that live in the local area. These staff members are likely to have more to talk about with your potential customers.
  • Offer a local delivery service
  • Offer one to one customer service, having one to one customer service in your store makes the customer journey more personalised.

 

Focus on What You Can do that those Large Retailers Cannot

Small local retailers should consider what they can offer that large retailers cannot. Nothing can beat the sensation of a physical shopping experience. This is because consumers can see the products first hand. Small local retailers should look at improving this experience so the customer is drawn to the product and is more likely to purchase it. Don’t just let them touch and look at the products allow them to try them out. If your store sells sports equipment, for example, tennis rackets allow your consumers to try them out.  These types of customer demos are key in persuading them to purchase the product and something that cannot be replicated on a screen. Secondly, they will remember the customer experience and will return to your store when they want to purchase another product.

 

How can we Help?

At Hawsons we have a dedicated team of retail accountants at our offices in Sheffield, Doncaster, and Northampton. We offer a specialist service to retailers of all types and sizes. We can assist you with all your accountancy and taxation needs, utilising our in-depth knowledge and experience in the sector from single sites to multi-channel retailers.

 

 

Free initial meeting

Pete Wilmer, Corporate Finance Partner

Pete Wilmer

Corporate Finance Partner

0114 266 7141