Britain’s retail industry has issued a stark warning that rising employment costs and tighter labour conditions are pushing young people out of the job market, raising concerns about a growing generation excluded from early work experience.
The British Retail Consortium (BRC) has called on Chancellor Rachel Reeves to slow what it describes as rapidly increasing costs of hiring staff, arguing that recent tax and wage policies are forcing employers to scale back entry-level recruitment.
According to the BRC, the combined impact of higher employer National Insurance contributions and increases in the minimum wage has added around £6.5 billion to retailers’ wage bills in the past financial year. The group says this pressure is now feeding into hiring freezes, reduced working hours and fewer opportunities for young job seekers.
Helen Dickinson, chief executive of the BRC, said the situation is worsening quickly, with entry-level roles disappearing across the sector. She argued that rising costs and regulatory burdens are making it harder for businesses to take on inexperienced workers, particularly in retail, hospitality and leisure.
The political context adds further pressure. A survey conducted for the BRC by Opinium found that 49 per cent of the public believes the government should do more to support unemployed young people, highlighting growing concern over youth job prospects.
Official figures from the Office for National Statistics show that more than nine million people aged 16 to 64 were economically inactive between December and February. At the same time, job vacancies have fallen by about 18 per cent since mid-2024, equivalent to roughly 156,000 fewer openings. Entry-level roles, traditionally a starting point for young workers, have been among the hardest hit.
Unemployment among 16 to 24-year-olds reached 15.8 per cent in the three months to February, more than triple the national average. Analysts say the figures reflect a narrowing pipeline of early work opportunities that once helped students and school leavers enter the workforce.
Adding to employer concerns is the growing influence of artificial intelligence in recruitment and workplace operations. A survey by the Institute for Student Employers found that nearly 90 per cent of companies expect AI to reshape entry-level hiring, with many anticipating fewer junior roles in sectors such as tourism and legal services.
The government has defended its approach, with ministers pointing to stronger overall employment figures and arguing that recent wage increases support households facing high living costs. They say more than 300,000 additional people are in work compared with a year earlier.
However, retailers argue that rising costs combined with technological disruption are creating a structural challenge. Industry leaders warn that without intervention, young people risk being shut out of the labour market at a critical stage in their careers, with long-term consequences for skills development and economic mobility.
