The UK retail and hospitality jobs market in 2026

State of the sector

Retail and hospitality are the most measurably impacted sectors in the 2026 UK labour market. Industry trade bodies report 164,641 jobs lost in total since the autumn Budget, with hospitality bearing 84,000 of those (about 45% of the total) and retail bearing a significant further share. That is roughly three times the Office for Budget Responsibility's original forecast of 50,000 net job losses from the employer NI change.

The British Retail Consortium estimates retailers have faced an additional £7 billion in costs from National Insurance, packaging taxes, and other regulatory changes. UKHospitality estimates the hospitality sector has absorbed £3.4 billion in extra costs. The combination of NI rate rise (13.8% to 15%), threshold reduction (£9,100 to £5,000), and forthcoming April 2026 business rates changes has tipped many medium-sized chains and independent operators from "hiring cautiously" to "actively cutting".

Despite the contraction, the sectors remain among the largest employers in the country. Recruitment continues at supervisory and specialist levels (head chef, restaurant manager, area manager, retail buyer, e-commerce specialist) and for shift work in established chains that have not been forced into restructuring.

Policy and cost pressures

The April 2025 employer NI rise had a sharper per-head impact on retail and hospitality than on most other sectors because the workforce skews toward lower wages and part-time hours, meaning the £5,000 threshold change drew in many roles that previously sat below the £9,100 line. Per-FTE cost increases of £700-£900 were widely reported across the sector.

The April 2026 business rates revaluation, with its higher multiplier for properties valued over £500,000, is expected to add further pressure on high street retailers and large hospitality venues. UKHospitality and the BRC have publicly warned that around 120,000 high street jobs are at risk if no transitional relief is granted.

The Employment Rights Act 2025 day-one statutory sick pay rule (effective April 2026) is most impactful in retail and hospitality, where high turnover and shift-pattern working historically meant a meaningful share of staff never reached the previous SSP earnings threshold. This is a clear positive for workers but a new cost line for operators.

Counter-trend: discount retailers, food-to-go chains, value hospitality formats, and cleaning / facilities services tied to retail are all continuing to expand as consumer spending shifts down-market. The recruitment market is contracting at the premium end and steady-to-growing at the budget end.

What this means for applicants right now

• Lead with reliability, customer-facing experience, and any supervisory or scheduling responsibility. In a contracting hiring market these become the deciding factors faster than they do in expansionary times.
• If you have been displaced from a closing venue or branch, frame it factually in your opening line and move on quickly. The reason for availability is fully accepted in the current market and does not need long explanation.
• Consider the geographic shift. Discount and value-end chains continue to open branches in lower-cost commercial areas, often outside city centres. The location of the role may need more flexibility than you would normally want.