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Online shopping makes many high street jobs unviable, says Next boss Online shopping makes many high street jobs unviable, says Next boss
(about 3 hours later)
Simon Wolfson warns lockdown has put thousands of traditional retail roles at riskSimon Wolfson warns lockdown has put thousands of traditional retail roles at risk
The Next chief has said the shift to online shopping triggered by the lockdown has made thousands of traditional retail jobs unviable. The chief executive of Next, one of the UK’s most successful retailers, has said the shift to online shopping triggered by the lockdown means there is no future for thousands of traditional retail jobs.
The high street has been one of the worst-hit sectors of the economy with nearly 125,000 jobs lost in the UK in the first eight months of this year as retailers closed stores and in some cases went into administration.The high street has been one of the worst-hit sectors of the economy with nearly 125,000 jobs lost in the UK in the first eight months of this year as retailers closed stores and in some cases went into administration.
Simon Wolfson said what looked to be a permanent shift to online spending had created work for warehouse staff and delivery drivers but that in the long run fewer people were going to be needed in shops. Simon Wolfson said what looked to be a permanent shift to online spending was creating work for warehouse staff and couriers but that in the long run fewer people were going to be needed in shops, and their jobs would be “unviable”.
“I wouldn’t want to underestimate the difficulty that is going to cause a lot of people who work in retail, I think it’s going to be very uncomfortable,” he said. “I wouldn’t want to underestimate the difficulty that is going to cause a lot of people who work in retail,” he said. “ I think it’s going to be very uncomfortable.”
Next has emerged from the crisis as one of the high street’s most resilient brands. Last week it raised its profit guidance for a second time as the company’s sales recovered from the shock of the lockdown when its stores were closed for several months. Marks & Spencer, Debenhams and John Lewis are among the household names to have announced major job cuts as a result of the pandemic.
The chancellor’s winter jobs plan, announced on Thursday, was “very sensible”, Wolfson told the BBC. The Tory peer suggested it was “important that employers begin to pay a little bit more for the schemes and that employees get a little bit less … Otherwise I think there’s a risk that our economy will just become hooked on it.” His comments came as the British Independent Retailers Association (Bira) warned of mass store closures after the chancellor scrapped the autumn budget when they had hoped he would extend the business rates holiday, which is currently slated to end on 31 March.
As party of the government’s emergency coronavirus support package, retailers have been granted a business rates holiday. However Wolfson complained the current system was “unfair” and bills for the warehouses used by online retailers needed to rise to reflect the new high street reality. Andrew Goodacre, the Bira chief executive, said many jobs in retail were not sustainable due to low footfall and low shop sales. “More needs to be done to protect the high street from mass closures and we hope that cancelling the budget does not delay decisions on business rates.”
Business rates are calculated by multiplying a property’s rental value by the multiplier (the number of pence-per-pound of rateable value you need to pay in tax). Bills have risen steeply in recent years partly because the 2015 revaluation of property values was delayed until 2017. The multiplier has also risen from 34.8p in the pound back in 1990 to 51.2p for stores paying more that £51,000 in rent. Wolfson said the current rates system was “unfair” and bills for the warehouses used by online retailers needed to rise to reflect the new high street reality.
“Over the last six or seven years the price of warehousing has gone up dramatically, and the price of shops have come down dramatically, but both of their rates have remained exactly the same,” Wolfson said.“Over the last six or seven years the price of warehousing has gone up dramatically, and the price of shops have come down dramatically, but both of their rates have remained exactly the same,” Wolfson said.
“You could raise rates on warehousing between 30% and 50% and that would make up for some of the loss and that would be fair.” “You could raise rates on warehousing between 30% and 50% and that would make up for some of the loss, and that would be fair.”
The pandemic has accelerated changes in shopping behaviour as the lockdown forced Britons online, in many cases for the first time. The transfer of sales from physical stores to websites has put shop floor roles in jeopardy but created thousands of new online roles.
The delivery firm Yodel said on Friday that it would recruit nearly 3,000 people, including couriers and parcel sorters, before Christmas.
However, only 450 of Yodel’s new hires will be employees. The other 2,500 will be a self-employed and so not guaranteed the legal minimum wage, full sick pay or holiday benefits. The picture is similar to Hermes which in July said it was creating more than 10,000 jobs, the lion’s share of whom would be self-employed.
Next has emerged from the crisis as one of the high street’s most resilient brands. Last week it raised its profit guidance for a second time as the company’s sales recovered from the shock of the lockdown when its stores were closed for several months.
The chancellor’s winter jobs plan, announced on Thursday, was “very sensible”, Wolfson told the BBC. The Tory peer suggested it was “important that employers begin to pay a little bit more for the schemes and that employees get a little bit less …Otherwise I think there’s a risk that our economy will just become hooked on it.”