The boss of fashion retailer Next has warned that hundreds of thousands of retail jobs could become “unviable” due to a more permanent shift to online shopping caused by coronavirus.
Lord Wolfson, who heads up the British high street chain, said there were tough times ahead for the sector, following the Chancellor’s announcement of the Jobs Support Scheme on Thursday.
“I wouldn’t want to underestimate the difficulty that is going to cause a lot of people who work in retail, I think it’s going to be very uncomfortable,” he told the BBC.
The new scheme, which will succeed the furlough scheme at the start of November, will require employers to pay more of their staff’s wages, while the government will pay just 22 per cent.
At the peak of the furlough scheme the government had covered 80 per cent of employees wages, while businesses did not have to contribute until August.
However, Lord Wolfson welcomed the scheme and added that he did not think Next would need to use it in the lead up to Christmas, with less than 10 per cent of staff currently on furlough.
“We don’t think we need it,” he said. “But we think there are other sectors that desperately will.
“We think by the time it gets to the end of October, there’ll be enough work through the normal build up to Christmas to employ all the people that we’ve currently got on furlough,” he said.
He added that new jobs would be added in call centres and distribution centres.
He also said that it was important companies learn to survive without the government’s support.
“It seems like a very sensible scheme to me,” he said. “I think it’s important that employers begin to pay a little bit more for the schemes and that employees get a little bit less – because otherwise I think there’s a risk that our economy will just become hooked on it.”