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Data: Shoppers fear Labour budget will trigger retail job cuts and price hikes

Data: Shoppers fear Labour budget will trigger retail job cuts and price hikes

Shoppers across the UK are expressing growing concerns over the impact of the government’s recent Budget, with many fearing job losses and price increases in the retail sector.

New research by the Retail Technology Show (RTS) found 62% of consumers worry that rising labour costs, triggered by National Insurance and National Minimum Wage hikes, will lead to fewer staff in stores.

A significant portion of respondents (67%) also anticipate that these cost pressures will result in fewer employees available to assist customers.

The findings echo the concerns of the British Retail Consortium (BRC), which previously warned that rising staff tax bills could lead to “inevitable” job cuts across the retail sector.

BRC CEO Helen Dickinson described the Budget’s effects on retailers as having a “disproportionate effect,” especially on the 5.7 million UK retail employees who are already feeling the strain of escalating operational costs.

Retailers like New Look and Next have already indicated they will reduce headcounts in response to rising labour costs, with Next’s CEO warning that wage hikes could lead to staff cuts or reduced working hours.

New Look is also set to speed up its store closures as part of a broader response to the increasing cost of doing business in the UK.

Consumers agree that staff presence is a critical factor in driving sales, with 55% of respondents saying store associates are a key factor in conversion rates.

The research also revealed that 41% of customers tend to spend more in well-staffed stores while 78% of UK shoppers are more likely to return to stores where they’ve received excellent service, reinforcing the crucial role that retail workers play in customer loyalty.

Despite recognising the challenges posed by the new tax regime, over half of consumers (55%) believe that large retailers should accept rising wage bills as part of their social responsibility.

Additionally, 71% of shoppers are more likely to support retailers that are known for taking good care of their staff, while 76% feel that these businesses are typically the most financially successful.

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