Retail employment has come under renewed pressure after the latest ONS labour market figures showed vacancies falling to their lowest level since 2021, prompting fresh warnings over hiring, youth employment and rising staff costs across the sector.
The Office for National Statistics said the UK unemployment rate fell to 4.9 per cent in the three months to February 2026, while the employment rate slipped to 75 per cent and economic inactivity rose to 21 per cent.
Early estimates also showed payrolled employees fell by 65,000 year on year to 30.3 million in March, while vacancies dropped by 29,000 on the quarter to 711,000, the lowest level since February to April 2021.
Reacting to today’s labour data, Chris Robson, Employment Tax Partner and Fair Pay Lead at RSM UK, stated, “It’s not surprising that employment within the retail sector in March hit its lowest level since records began, as more than a quarter of retailers (27%) are looking to mitigate the impact of April’s national minimum wage changes by reducing the size of their workforce.
“As a large employer of younger workers this will acutely hit youth employment, particularly when they are hiring, they are reducing entry level roles with almost half (48%) looking to recruit experienced hires instead.
"The pressure on staff costs is already having unintended consequences, and this could get worse with future plans to bring in one standardised NMW rate - becoming a further disincentive for recruiters to hire younger inexperienced staff.”
Jacqui Baker, partner and head of retail at RSM UK, added: “This indicates a worrying trend within retail as around a quarter of young people start their careers in the retail sector – demonstrating the acute impact a NMW changes could have on the job prospects for young people.
"If this weakness in the job market and low growth continues then this gateway into the workforce for young people could be hampered further - exacerbating the youth unemployment risk.”