Retail prices to rise due to reduction in availability of skills

The British Retail Consortium said the UK's withdrawal from the EU is already having an impact on retailers. EU workers make up 6% of the UK's retail workforce and a high proportion of retailers employ EU nationals.

The BRC's report, The People Roadmap (13 page / 353KB PDF), revealed that 22% of retailers have already lost EU employees since the Brexit vote in June last year. Meanwhile 56% of retailers say their EU employees are concerned about their right to stay in the UK and 39% said workers are considering leaving the country.

This uncertainty and loss of labour force is already having an impact on prices, according to the report. The BRC said 13% of retailers had raised prices to offset rising employment costs, and a further 25% would consider raising prices in the future.

The BRC is calling on the government to safeguard the labour force and help protect against rising prices. It said the UK needed to introduce a demand-led system for employing overseas nationals which did not require employer sponsorship.

“Brexit presents the opportunity to ensure a new immigration system rationalises the interplay between the immigration rules and employment law,” the BRC report said. “The current immigration rules for non-EU nationals are often incompatible with UK employment law and employment practices, leaving retailers vulnerable to legal recourse or a loss of their sponsor licence.”

It said the UK government should take the opportunity to ensure “effective integration” between domestic employment law and any new immigration system.

The BRC report follows news that net migration had fallen to +248,000 at the end of 2016, down from +332,000 at the end of the previous year, with an increase in those leaving the UK from the EU.

In July the UK government outlined proposals which would allow EU citizens to stay in the UK after Brexit, although the final details are yet to be confirmed.