Retail pay growth outstrips UK as a whole

Wages growth in the UK retail industry outpaced pay rises in the UK economy as a whole, according to a new report.

The Office of National Statistics (ONS) Annual Survey of Hours and Earnings found that the average hourly pay rate was up by 4.6 per cent in retail in 2017, compared with 2.9 per cent growth for the UK as a whole.

According to analysis by the British Retail Consortium (BRC), the retail sector is also closing the gender pay gap as it is lower than the economy as a whole, falling from 11 per cent last year to 9.2 per cent.

London has the highest hourly pay rate for retail workers at £10.15, while Northern Ireland has the lowest at £7.75.

However, the BRC anticipates that, as the industry undergoes structural change, the number of jobs in retail will fall and pay will increase.

Currently, retail employment sits at 3.2 million. However, this number is falling, according to the BRC’s Retail 2020: Fewer But Better Jobs report.

Retail productivity is increasing 2.2 per cent a year, compared with 0.8 per cent for the UK as a whole, while employee engagement stands at 57 per cent and improving.

BRC chief executive Helen Dickinson said: “This new data highlights a stark contrast between rapid pay growth in retail with the rest of the economy. The retail industry is outperforming the economy as a whole and is continuing to make progress on a journey to the higher-paid and better jobs of the future.

“The National Living Wage has had a part to play in driving this exceptional growth in wages. However, far from being the whole story, strong productivity growth, fuelled by technological change, has also contributed to year-on-year pay increases above the UK average at all levels of the retail industry. And, despite fears to the contrary, there’s little evidence that these wage increases are coming at the expense of other wage-related benefits.

“Maintaining productivity gains will be crucial to sustaining wage growth, as employers contend with further changes to statutory employment costs. Our Retail 2020 Dashboard shines a light on how the retail workplace landscape is changing as a result of big structural changes.”

Heather Barson, director of retail and hospitality at Fujitsu UK, commented: “Since the industrial revolution, we’ve seen how emerging technologies have the potential to reshape the way we work. Today, retailers are one of many industries at the forefront of this revolution, privy to the role that technology plays in differentiating their experiences from the competition.

“Retailers should be using these technologies to remove repetitive tasks, and make way for employees to spend more time focusing on the customer. Doing this will allow them to better provide a more personalised service for customers, complementing the experience they find online. While technology can be used to improve a retailer’s service and better equip staff, the human touch will always be necessary to make that emotional connection.

“And when considering the ever-increasing rise in multifaceted jobs, prioritising technology to take on the time-consuming and mundane tasks will help create a new set of jobs with a new skill set that balances the retail roles that are now using technology.

“In a world where retailers are increasingly needing to think of innovative ways to provide the ‘heightened experience’ that consumers now demand, retailers should be bringing technology and employees together, not tearing them apart. After all, while technology is transforming the workplace, humans are the ones who will accelerate its impact.”