Hanging tough: How the retail sector is weathering the storm

With the recession dominating headlines every day, job security is naturally at the forefront of many people's minds. Dramatic coverage of big-name retail companies going under understandably puts everyone on edge and raises doubts about the sector's potential to offer strong career pathways, not only for existing employees but also those looking to start work in the industry.

However, delve a little deeper and there are reports of retailers expanding, and needing to recruit new staff in their thousands; Sainsbury's recently announced a sales increase of 6.8 per cent in the first quarter of 2009.

So what's the real story? What kind of shape is the recession-hit industry really in? And what is the diagnosis from those in the know?

The messy and very public insolvency of Woolworths – a UK high-street institution – meant that it was a sombre start to 2009 for the retail industry, not least for the employees across its 800 stores. The media had its first big recession scalp and duly reported its downfall as though covering the demise of an old friend.

The truth is that even though this household name enjoyed remarkable longevity in its 100 years on the high street it had, by its own admission, lost its way in the last few years; this was not the rapid downfall of a flourishing and successful business. Where other retailers had adapted and evolved to move with the times, Woolworths soldiered on with what became an overly eclectic product range and struggled to find a suitable niche for itself in an increasingly competitive retail world.

A knock-on effect of this collapse was that another high-street name, Zavvi, quickly found itself in difficulties. Entertainment UK, Woolworths' wholesale arm, had been Zavvi's main supplier and finding an alternative source of stock became a problem, meaning it was effectively crippled at the worst possible time.

Again, big job losses were the talk of the tabloids. But the likes of Woolworths and Zavvi going to the wall should be taken in context: they represent the unfortunate closure of some well-known retail businesses already in difficulties, not the death knell for the entire industry. It is also crucial to remember that despite the picture painted in the press, redundancies in the retail sector are very different from redundancies in sectors such as car manufacturing.

Firstly, even when large retailers close, the losses are distributed across stores all over the UK, not just in one local community. Secondly, on average retail accounts for 10 per cent of the workforce whatever the economic circumstances so, even in the midst of a long and unpleasant recession, it will remain the largest private sector employer for the foreseeable future.

"With a total of 3 million retail employees in the UK, the closure of 18 companies means a loss of around 43,000 jobs, equating to just 1.3 per cent of the retail workforce," says Anne Seaman, chief executive of Skillsmart Retail. "At the same time, 39,500 new jobs have been announced so far this year by companies including Morrisons, Sainsbury's, Tesco, H&M, Asda, Waitrose and Poundland. "So, for the moment, the retail landscape is actually much more even than the headlines would have us believe," she says.

Seaman compares the industry to a balloon that, when squeezed in one place during tough times, expands in another. "For example, despite the economic gloom, many discount supermarket- and grocery-sector retailers have done exceptionally well recently as cost-conscious consumers look to save cash," she says. "A day after the last 200 Woolworths stores shut their doors, Iceland bought over 50 of them and put on record its intention to create around 2,500 new jobs."

Shifts in consumer tastes and, therefore, movement between businesses in the workforce is all part of how this dynamic industry operates. Retail also has a high staff turnover of around 40 per cent a year, and there is always a need to replace the natural churn of people leaving or retiring from the sector every year.

In a recession this turnover will probably fall as people batten down the hatches and look to stay in work for longer but, nonetheless, the demand for people in the sector looks set to remain. Indeed, Working Futures, a new report from the UK Commission for Employment and Skills, estimates a potential requirement of around one million jobs that will need filling in the period up to 2017.

Trained, skilled managers are always at the top of any retailer's recruitment list, but the recent performance in areas of the sector such as grocery and supermarkets means many big household names will be keen to attract experienced staff at every level.

Nowhere is this more evident than on a website created to help ex-Woolworths employees find work, www.woolworthsreunited.co.uk. The retail jobs section of the site is inundated with hundreds of adverts from retailers looking to harness the invaluable skills and experience of displaced Woolies staff. Morrisons, Argos, Somerfield, M&S, Lidl, Robert Dyas, Boots, Mamas & Papas, Clinton Cards, Blacks, House of Fraser – the range of retailers fishing for talent gives every indication that any current retail job losses can be absorbed by the industry.

The transferable nature of retail skills is a major factor in how easily people can be re-absorbed. It also ensures that career pathways are open to you at whatever level you work in the industry, even in the depths of a recession.

A recent report produced by BMG Research found that over half of careers advisers believe retail is a better place to work now than five years ago at the height of the economic boom. When asked why the UK sector has improved as a place to forge a career, the most common response was, "An increase in opportunity and career structure." Further reasons included, "A wider availability of training and qualifications [and] better pay".

There is no doubt that having the right skills, training and qualifications in retail will put both current and future employees in the strongest position over the next 12 months. Indeed, the new National Skills Academy for Retail and its network of skills shops up and down the country are at the forefront of a renewed emphasis – from both government and retail businesses – on top-quality pre-employment training, upskilling and on-the-job learning, such as apprenticeships.

The industry wants to make sure that everybody working in retail has the right level of skills required to continue to contribute to the success of retail in the UK and achieve their personal ambitions. This will ensure that retail is in the best possible position when the upturn comes.

'Homebase offered to fund me through my degree'

Rob Smith is a store manager at Homebase who took a part-time degree in retail business management

"I started working part-time at Homebase while I was at sixth-form college and really enjoyed the environment. When I had finished my advanced GNVQ the time came for me to look for a full-time job. I didn't want to spend the whole of my career in an office but I didn't want to learn a particular trade either. This meant that a career in retail was a really good option for me to choose.

Homebase offered me a full-time job as soon as they found out that I was looking for a career in retail. I liked working at Homebase because it allowed me to do physical work as well as office work, so I accepted the offer right away.

A few years into my career – after I had been promoted to department manager – I decided to take a part-time degree in retail business management. Homebase offered to fund me through my degree by paying for my course fees, and also gave me one paid day off per week to attend university and one day off for study. It was quite a challenging period but I successfully completed my degree.

The best thing about working for Homebase is the variety that the job offers. Every day I meet new people, and when you're dealing with the public it means that every day presents new challenges. The job is really good for improving your personal confidence and has helped me to develop my communication skills.

I have always put in a lot of effort and a lot of hours because I wanted to get things right and in the long run, and I really feel as though I have reaped the benefits of that approach. In retail, hard work does not go unrewarded."

'The job has really helped to turn my life around'

Emma Hepden, 23, began working for Sainsbury's in December, having spent six years as a full-time mum to her two young children

"I work as a payroll clerk in the back office at Sainsbury's in New Cross Gate, London. My job involves lots of different duties, such as paying wages, sorting out absences and making sure that people have the right return-to-work papers. I get to work alongside managers and sometimes go and help out on the shop floor, stacking shelves or doing whatever's needed to help out.

It's great to have lots of different things to do. There are also some perks to working at Sainsbury's. After I've been here for six months I'll get a discount card that gets me 10 per cent off. They put it up to 15 per cent at Christmas, which will come in very handy!

I feel really lucky that I was offered the job because it's really helped to turn my life around. I can work around looking after my daughter – who is six years old and has just started school – and my son, who is two and goes to a childminder. I'm not saying it's easy, but I wouldn't change it.

Before I got the job I was looking after my two children and living on benefits. I'm busy now that I'm working – and I love being busy. To train for the job I had to go to college for four weeks before I started work. I also did a two-week work trial, which meant that I then felt comfortable in the role when I started on a full-time basis.

Ultimately, I hope that my career progresses as I want to move forward in my life. But I'm really happy in the job I've got at the moment. I plan stay at Sainsbury's for a while and just take each day at a time."