Despite a three percent drop in employment, Pet Gazette discovers that the retail sector is still going strong
“The pace of job reductions in the retail industry is gathering steam,” says British Retail Consortium (BRC) chief executive Helen Dickinson OBE. In October, the BRC reported a record reduction in retail employment. The total number of employees dropped by three percent compared to Quarter Three (Q3) last year. Overall, the hours worked in retail reduced by 4.2 percent. Full time labour was hardest hit, decreasing at a faster rate than part time work.
The BRC’s Helen Dickinson, feels multiple issues within the sector contributed to the sudden drop: “Behind this shrinking of the workforce is both a technological revolution in retail, which is reducing demand for labour, and Government policy, which is driving up the cost of employment. With both supply and demand pushing in the same direction, it’s little surprise that we’re seeing fewer people working in the industry.”
More consumers have been turning to online shopping, either for convenience or in search of ever-cheaper bargains. Earlier this year internet retailing was described as the fastest growing channel in the global petcare market by Euromonitor International, with reported worldwide growth of nearly 90 percent.
An outstanding 17 percent of total pet care sales now take place online in Asia Pacific, and the trend is also visible closer to home. Paula Flores, head of pet care at Euromonitor International says: “In Western Europe it accounts for eight percent but the pace has been picking up with such strong markets as the UK where retailing is quite developed and consumers are very used to online shopping.”
Online sales are only one reason for tougher circumstances. Government initiatives such as the change to business rates, which came into effect on April 1 this year, have also had an impact and could cause ongoing issues. Rates specialist CVS has already predicted property tax rises for next April, and believes 37,364 small shops will see their business rate bills rise above inflation with 30,198 small shops facing hikes in their rates bills of between 10 percent and 14.99 percent.
“In our experience, the threat to job security within the independent sector is not the internet but the increased cost of actually doing business on the high street,” says Bob Jarrett, membership and marketing director for the British Independent Retailers Association (bira).
He adds: “The continued burden and inequality of increased business rates, the introduction of the National Living Wage and other Government measures are the real culprits.”
Success and solutions
Dropping employment aside, 2017 has included positive moments for UK retail, including strong growth for some parts of the sector. Significantly, more traditional independent stores opened in the first half of 2017 than in the same period last year. The British Independent Retailers Association (bira) reported a net growth of +562 units in H1 2017 on the high street, proving that there’s still a demand for individual bricks-and-mortar stores.
Pay also improved. The BRC found that average hourly pay in retail was up 4.6 percent in 2017, compared to 2.9 percent growth for the UK economy as a whole.
In fact, the rise in internet retailing may not be negative for bricks-and-mortar stores, say some experts. The change in shopping habits may provide more motivation for high street stores to cement their reputation for excellent customer service and differentiate themselves from competitors.
Ian Cass, managing director of the Forum of Private Business, explains: “Online trading has definitely taken off in the last few years and some high street businesses have suffered as a result. But that said, change is something that most independent retailers are used to and the key for the good ones is to evolve and fit into this new retailing world.
“The challenge is to create better retailing experiences, to appeal to all of the customers’ senses and to give them a shopping ‘experience’ that they enjoy, want to experience again and recommend it to others.”
Ecommerce may open new opportunities. Retailers can supplement their high street shops with online offerings. The best websites can have similarities to good bricks-and-mortar stores. Friendly, advice-packed blogs share information essential to pet owners, making the site a go-to destination in much the same way as knowledgeable staff draw in shoppers.
By allocating a tech-savvy staff member to maintain social media pages, retailers can answer queries in real time, flag up any new stock and direct potential customers to high street stores. Ian Cass suggests: “Research other retailers to see what you can pick up in terms of best practice and undertake further research into the online channel to see if there’s anything you can learn there.
“The retailers in a town can set up a retailer group to try and make shopping in their town a great experience, organising events and shared initiatives ultimately working together for everyone’s benefit.”
Quarter 4
The next few months may see an up-swing in retail employment, for high street stores. The BRC found that 50 percent of the respondents to its Q3 survey were considering taking on extra staff in Q4 to support them at their busiest time of year.
For the pet sector, at least, online shopping may not have a lasting impact on high street sales over the next few months. Bira’s Bob Jarrett says: “The internet is now firmly embedded as part of the retail experience for both retailers and customers alike. It’s here to stay and will continue to develop as a key element of the omni-channel retail environment. That’s the reality but to what extent has this impacted on the high street both in terms of trade and job opportunities particularly for independents?
“Looking at the latest quarterly bira sales monitor figures for pet stores in particular, the answer is clearly none as far as trade is concerned, with increased overall sales figures being recorded for two consecutive quarters.”
