In the second quarter of 2010, retail full-time
equivalent (FTE) employment was up by 3.6 percent compared with the same
quarter a year earlier. This is equivalent to a net increase of 22,055 retail
jobs.

The increase in employment was driven by a 3.0
percent net annual increase in the number of stores in the second quarter – 486
additional retail outlets. The latest data confirm the retail sector continued
to create employment in June, the number of FTE employees up 3.0 percent
year-on-year, while there was a net increase of 3.1 percent in store numbers.

The first quarterly BRC-Bond
Pearce Retail Employment Monitor (REM) shows that 58 percent of retailers
intend to maintain staffing levels in the coming three months, while one in
three intends to increase employment.  Only eight percent of our sample
intend to cut staffing levels in the next three months. Compared with
intentions this time last year, the Monitor suggests that retailers feel
slightly more confident about maintaining and increasing levels of employment.

Stephen
Robertson, British Retail Consortium Director General, said: “This is the first
time retail employment data this up-to-date has been available and it shows
retailers driving the recovery.

“It’s a
remarkable achievement that, in the face of economic uncertainty, retailers in
our Monitor have created 22,000 jobs and added nearly 500 stores since this
time last year. Economic conditions and consumer confidence have certainly
improved in the last 12 months but from a weak starting point.

“Consumer
spending has been surprisingly resilient over the year and generally retail
sales have remained robust. With unemployment at 2.5 million and with
significant public sector cuts to come, it’s encouraging retail is actively
creating jobs.

“The sector
currently employs 2.9 million people. In this difficult environment,
politicians must think very carefully before introducing burdens on retailers
that risk undermining their vital role in generating jobs.” Christina
Tolvas-Vincent, Head of Retail Employment at business law firm Bond Pearce,
said: “With retailers representing 8 percent of GDP and 11 percent of the total
UK workforce, these are encouraging results for the overall economy. 
During the worst recession for two generations retailers have kept their eye on
the long game, as demonstrated by their continued investment in staff and
stores. 

“The retail
sector is often seen as a barometer for business confidence at large and such
solid growth, in extremely difficult conditions, is a positive indicator that
we are moving in the right direction.  However, we are not out of the
woods yet; with the effect of public sector cuts and the increase in VAT still
to come, there are challenges ahead and the next six months will be critical
for the sector.”

The latest official
Government statistics showed a slight improvement in the labour market overall.
The unemployment rate for the three months to May was 7.8 percent, down 0.1
percentage points on the quarter. The number of unemployed people fell by
34,000 over the quarter to reach 2.47 million. The claimant count fell in June
by 20,800 to reach 1.46 million.

Considering the depth of the
recession, the labour market has been surprisingly resilient compared with
previous recessions. The number of claimants continued to rise for fifteen
months following the end of the recession of the early 1990s and for 28 months
following the recession of the early 1980s.  In 2009, the claimant count
began to reverse just after the end of the recession, now having fallen for
five consecutive months.

According to the BRC-Bond
Pearce REM, the retail labour market outperformed all other sectors of the
economy throughout the recession and continues to do so in the recovery. During
the last 12 months the economic environment has recovered considerably.
Improvements in consumer confidence, easing credit markets, a revival in the
housing market and crucially, action taken by the Bank of England, have all
supported growth.  As a result, consumer spending has been surprisingly
resilient given the size of the downturn and retail sales have remained robust.
These factors have given many retailers the impetus to continue to invest and
pursue growth strategies, thereby creating new stores and job
opportunities. 

In the three months to June,
FTE retail employment was up by 3.6 percent compared with the same period last
year – the equivalent to a net increase of 22,055 retail jobs in our
sample.  This was up on the first quarter in 2010, when FTE employment
grew by 1.8 percent (chart 2) compared with the previous year. 

Although the Monitor is
still in its infancy, the series only stretching back to October 2008, annual
comparisons revealed strong retail job creation for nine consecutive months,
shown in chart 3. The overall trend reveals that the rate of growth has
generally increased during the last nine months.  

The increase in the level of
employment was driven by an expansion in store numbers which rose by 3.0
percent in the second quarter, year-on-year.  This was equivalent to an
additional 486 retail outlets in our sample.  Chart 4 demonstrates the
growth in retail outlets since October 2008, compared with the average number
of FTE employees per store.

Retail
employment growth outperforms the overall economy. Throughout the
year, average FTE employment is fairly volatile and responsive to seasonal
demands.  The spikes can be attributed to the demands of Christmas, but
accounting for fixed effects, this measure remained fairly stable throughout
the quarter.  One-off factors, such as the World Cup, acted as a mild
boost to annual employment levels. Some of the increase in staffing levels can
be attributed to stores changing stock lines and altering display units in the
run-up to the World Cup – although the overall impact was likely to be
slight.   

The creation of
new outlets and jobs was heavily weighted towards the grocery sector which
continued to open new stores throughout the quarter. The number of redundancies
as a proportion of the overall retail workforce is extremely low.  On
average fewer than one in 1,500 employees was made redundant each month in the
last year.  Recently, the measure has been more volatile, which is likely
to be due to seasonal factors such as the timing of Easter sales falling in
April last year, but March and April this year. 

Comparatively,
the redundancy rate in the overall economy remained higher than the retail
sector, according to our sample.  However, the redundancy rate in the
overall economy has steadily declined over the last 12 months.  It is
likely that the rate will rise in the medium term to reflect sharp spending
cuts in the public sector.