Olympic bounce for retailers led by supermarket expansion

RETAILERS offered a rare ray of light amid the economic gloom this morning as it emerged that just 4 per cent of shops expect to shed staff in the months head, down from 25 per cent at this stage last year.

Optimism has been buoyed by Mary Portas’ scheme to breathe fresh life into high streets and by Sunday trading hours south of the Border being relaxed for the Olympics, according to the British Retail Consortium’s (BRC) quarterly jobs study.

Today’s survey flies in the face of recent downbeat data, with figures earlier this month from insolvency trade body R3 suggesting that a quarter of shops and one-fifth of hotels in Scotland could go bust in the year ahead.

The BRC’s report found that the equivalent of more than 12,600 full-time posts had been created in the retail sector in the three months to 30 June, with supermarkets leading the charge.

Tesco pledged to put more staff into stores following its shock profits warning in January, while both Sainsbury’s and Tesco have been opening more convenience outlets and smaller-format shops.

But experts warned that the upbeat news on job prospects masked “serious concerns” for the sector, with the total number of shops in the UK dipping by 0.5 per cent quarter-on-quarter, the first fall since the survey began in 2008.

Christina Tolvas-Vincent, head of retail employment at law firm Bond Pearce, which compiled the survey with the BRC, said: “At first glance, there are some positive messages here – rising employment, which translates to more than 12,000 extra full-time equivalent jobs, and redundancy rates remaining very low. Serious concerns remain, however. The number of retail outlets is falling for the first time, reflecting immense pressure on high street retailers and for non-food retailers, employment levels are down.”

She added: “It has been a summer of ups and downs so far with the Jubilee celebrations, the record amount of wet weather and the build-up to the Olympics all having an impact on the industry.

“But the reality of the situation may be clouded as a result. It will be very interesting to see what the next quarter brings.”

Figures out last week from the Scottish Retail Consortium showed that sales north of the Border had flatlined last month, meaning Scotland had lagged behind the UK as a whole for the 15th month in a row.

Official data from the Office for National Statistics last week showed smaller shops were faring better than large shops in the UK as a whole.

Stephen Robertson, director general of the BRC, said the retail sector was making an important contribution to the broader economy. He said: “Retail as a whole is still where much-needed jobs are coming from but, within that, it’s food retailing that’s providing more work.

“The first decline in store numbers among retailers shows the worst-hit shops being shut as customers hold back spending. Supermarkets, continuing to open smaller-format stores, are masking the potential of a much sharper decline. Without them, total shop numbers would have fallen further.

“Even so, retailers’ sentiment about the coming quarter has improved. A year ago a quarter said they would be cutting jobs. Now that’s only 4 per cent. And, the relaxation of Sunday trading laws during the Olympics is expected to provide a boost to the number of hours worked.”