UK retail job vacancies hit five-year low as hiring slows

UK retail and hospitality employers pulled back on hiring in the spring, pushing job vacancies to their lowest level in five years. The Office for National Statistics reported 707,000 open positions in the March-to-May period, the smallest count since the three months through April 2021.

The drop extends a cooling trend that began in mid-2022, when vacancies peaked above 1.3 million. Since then, rising employer costs and softer consumer demand have squeezed margins across the sector, forcing chains to slow recruitment. The ONS data showed the largest declines in retail trade, accommodation, and food services – the three categories that together account for roughly a third of all UK job openings.

Wage growth has also moderated. Average weekly earnings for new hires in retail and hospitality rose 3.2% year-on-year in the period, down from 5.1% a year earlier, according to separate ONS figures. That narrowing pay gain reflects both weaker demand for workers and a larger pool of available candidates, as labour-force participation has edged higher.

The figures come ahead of the Bank of England's next rate decision, where policymakers are weighing whether the softening labour market justifies a cut. Governor Andrew Bailey said last week that the committee was watching wage and vacancy data closely for signs that inflation pressure was easing. A continued slide in openings would strengthen the case for lower rates, several economists said.

For retailers, the hiring pullback means thinner payrolls but also less upward pressure on wage bills, which had been the fastest-growing cost line for many operators. The question now is whether the vacancy decline is a normalisation after the post-pandemic hiring surge or the start of a deeper contraction tied to weakening consumer spending.