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Retail at the crossroads

Author: Cameron Tait, Head of Changing Work Centre, Fabian Society

The UK retail industry is at the crossroads. Depending on which road the industry takes, we could end up with millions of job losses in a soulless virtual world, growing exploitation in a race to the bottom on price, or a more human experience in which a renewed commitment to engagement, service and community flourishes.

The Fabian Society’s retail taskforce, supported by the Trust for London and the Joseph Rowntree Foundation, has spent the last year looking at how pay and productivity can be boosted in Britain’s biggest industry.

Retail is a pillar of the UK economy, providing one in every eight jobs, representing one in every ten local businesses, and accounting for £180 billion of the country’s total economic output.

But the industry has become a haven for low pay, with 40 per cent of retail workers paid less than two thirds of the national average. And major changes in the retail landscape are calling the sector’s ability to sustain its current levels of employment in to question.

Following a period of strong growth between the early 1980s and the mid 2000s, the retail industry has reached an impasse. The reduction of household spending and other cyclical responses to the recession have been compounded by structural shifts in customer habits and the rise of online retail.

A number of notable retailers have entered administration, others are closing stores, and some are reducing pay and the quality of work to squeeze every efficiency from their cost bases. Going into the future, the increasing affordability of advanced technology has the potential to hugely disrupt large swathes of the retail workforce as employers increasingly consider automating various tasks.

But so far the government has been silent on the future of the sector. In fact, the retail industry has been ignored by the government’s recent industrial strategy. Plans for fifteen industries have been referred to in major speeches from the prime minister and cabinet ministers, but retail has not yet figured.

The taskforce has come up with a blueprint to put this right with good jobs at its heart. Our ten point plan not only provides a means to support stable employment in the industry, but to improve pay and conditions and revitalise local community spaces.

The taskforce’s recommendations include a new plan to diversify the mix of retail ownership, a new ‘super skills council’ to drive up standards, action to clamp down on monopolies, investment in research and development, tax reform to level the playing field between online and store-led retailers, and new powers for local authorities to work with retailers to revitalise their communities.

The UK’s retail industry has the potential to play a prominent role in the UK’s return to strong economic and productivity growth. But as one supermarket worker told the taskforce, all too often “we’re not taken seriously as retail workers. I think people still have that attitude out there that, especially women retail workers, you’re out there for pin money.”

The absence of retail from the industrial strategy suggests that the oversight of the retail industry and its workforce runs right to the very top of government. This needs to change, and the prime minister’s modern industrial strategy needs an urgent recalibration before its next public outing. Otherwise, like the misfiring missile that overshadowed its launch last week, it will miss the target again.

Cameron Tait is head of the Changing Work Centre and was secretary to the Fabian Society’s retail taskforce.