There were 40,000 fewer UK retail sector jobs recorded in September compared to a year ago and 225,000 fewer than five years ago, according to the latest job figures from the Office for National Statistics (ONS).

The British Retail Consortium (BRC) cited a cause as the cost of retail hirings having risen “significantly” in recent years with pay growth in the industry well above the national average at 8.5% in 2024, and up over 25% since 2021.

It also noted that September is traditionally the hiring low-point of the year with 2.81 million jobs recorded in retail before the numbers rise again ahead of the peak Christmas period.

But the month’s fall in the job numbers can be “partially explained by ongoing transformation in the industry, from increased investment in automation and higher productivity, to a shift to outsourcing of warehousing and logistics that are not all captured by the ONS retail figures”.

Despite the fall, the industry remains the largest private sector employer in the UK, with another 2.7 million in the supply chain.

However, with the post-Christmas retail hangover set to kick in during January, leading to retail closures and redundancies, and with government’s proposed Living Wage and employer NI contributions rising in April, retail employment figures could be set to take a further beating. Only on Wednesday Shoe Zone announced store closures as a direct result of Budget measures.

“This could hasten the reduction in retail jobs and particularly the recruitment of part-time roles, which have been falling in recent years,” said BRC chief Helen Dickinson.

Next April, the National Living Wage is set to grow by a further 6.7%, adding over £2.7 billion to retailer wage bills while changes to rate and threshold for employer NI contributions will also cost the industry over £2.3 billion, the BRC said.