United Kingdom

UK retail and hospitality groups warn of Christmas staffing shortages

British retailers and hospitality groups are warning of staffing shortages in the run-up to Christmas as they seek tens of thousands of temporary workers in preparation for the “golden quarter”.

Companies across retail, hospitality and manufacturing have warned they may struggle to meet demand even as the government considers relaxing immigration rules to allow more workers from overseas for key industries.

More than 250,000 seasonal workers are needed in the hospitality industry alone, according to estimates by trade body UKHospitality.

Pizza chain Domino’s said it planned to recruit 10,000 staff for the period, including delivery drivers and pizza makers. The chain is extolling its “flexible shifts to fit around existing schedules” in an appeal to people who may be seeking a second job to help with the cost of living crisis.

Retailers say the annual battle has begun to fill their warehouses ahead of Christmas peak sales but executives warn that the impact of Brexit on the UK’s ability to hire overseas workers is still being felt.

Many fear it will be difficult to meet the demand by hiring locally. “The reality is that not all jobs in the UK are attractive to people who live in the UK,” said one.

John Lewis is seeking to recruit 10,000 temporary workers for the Christmas period across its warehouses, supply chain and retail outlets.

“We start [hiring] in August every year, which seems nuts as no one wants to talk about Christmas,” said Andrew Murphy, chief operating officer at John Lewis.

He added: “In the temporary market, money talks. When supply is tight, pay goes up. We can set the rate of pay on a Tuesday morning but find it’s gone up again on Wednesday.”

The strength of its brand meant John Lewis had fewer problems than some to attract staff, said Murphy, with the added incentive of free lunches at its sites for those working the 14 weeks covering the peak season.

Even so, the retailer faces competition from numerous rivals, which has caused spiralling wage inflation. One competitor is known for parking signs outside John Lewis warehouses offering staff higher wages at its own site across the road.

Murphy said wage inflation would be about 6 per cent on average this year — last year it was 4 per cent — but added that retail margins would not support much more. Within this, wages for delivery drivers across the sector were rising between 17 and 25 per cent. Staff in warehouses in the Milton Keynes area, where the retailer operates one of its distribution sites, were typically seeing wages rise by about 11 per cent.

Amazon is one of the largest seasonal employers in the UK, typically recruiting up to 20,000 extra workers in warehouse and delivery as it meets demand for Christmas, according to those familiar with its operations.

Some retailers said the situation this year was at least less acute than in 2021, when the so-called pingdemic over the summer followed by the emergence of the Omicron variant in the autumn wreaked havoc with hiring plans.

David Gates, chief executive of wine merchant Direct Wines, said recruitment in its warehouses had been “slightly better than last year”. There is a shortage of local labour, he said, but a steady supply of EU workers who worked for the company over the Christmas period in 2021 and are looking to return.

However, at the company’s call centre, recruitment has been about the same as last year, or possibly worse, he said. Unlike in the warehouses, “the centre requires good English and hence the work is less attractive for most EU workers”.

Tesco’s chief executive Ken Murphy said the period last year in the run-up to Christmas was “very challenging, particularly in distribution and logistics”, when the supermarket group faced the threat of strike action by warehouse staff.

“We don’t have any of those issues this year and I haven’t had any reports of issues in hiring temporary people for Christmas. I think we’re in pretty good shape,” said Murphy.

Like several other supermarket chains, Tesco has announced an in-year pay increase for shop floor staff that will take effect in mid-November, just in time for the run-up to Christmas.

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