London's night economy thrives as retail sector declines

New research from Deputy, a workforce management platform, indicates that employment in the UK's retail sector remains 5% below pre-pandemic levels. This highlights the industry's ongoing decline amid challenges from automation and e-commerce.

The hospitality sector, however, is seeing a 2% year-on-year increase in job growth, driven by London's revitalised night-time economy. This trend has placed London ahead of other major cities such as Los Angeles and New York City regarding night-time economic activity, with 25% of consumer spending occurring at night. Fast food outlets, cafes, and restaurants benefit from this trend with increased demand for shift workers. However, traditional nightlife venues such as nightclubs and bars are not experiencing the same growth.

The data comes from Deputy's "The Big Shift 2025" report, created in partnership with Dr. Shashi Karunanethy, Chief Economist at Geografia. The report is based on an analysis of over 20 million shifts totalling more than 165 million hours of work from over 189,000 shift workers in the UK. It outlines significant trends and transformations within the hourly workforce, the decline of retail, and the rise of micro-shifts.

Silvija Martincevic, CEO of Deputy, commented, "The hourly shift work market is undergoing a rapid transition. Retail, once an industry powerhouse, is shrinking as automation and e-commerce take hold, pushing workers toward better paying jobs in hospitality, healthcare and services. Meanwhile, London's night-time economy is booming, with businesses adapting to rising after-dark demand from consumers."

As the retail sector faces these challenges, Deputy's report shows that home, hardware, and garden stores have seen a significant 9% decline in employment. Conversely, supermarkets have withstood these economic pressures, demonstrating resilience with a 4% growth in employment, attributed to a consumer focus on essential spending over discretionary purchases. Retail workers increasingly seek alternative income sources, with about 25% contemplating leaving their roles and another 25% working multiple jobs.

The report also highlights a shift in workforce dynamics, as 41% of shift workers favour micro-shifts over gig roles due to better income predictability and job security. This demand for change is partly driven by younger workers, particularly Generation Z, who are expected to surpass Millennials in the shift work sector by 2026.

Deputy's findings suggest that the growing preference for stable, structured employment opportunities encourages employers to reassess workforce planning and adapt to emerging requirements. As different generations reshape the labour market, there is an increased need for policy changes that accommodate these shifts.

Dr. Shashi Karunanethy emphasised the importance of adapting to these changes, stating, "The findings of The Big Shift: UK 2025 underscore the urgent need for businesses and policymakers to adapt to the new economic reality. Employers must rethink workforce planning, wage structures and scheduling to retain talent, and policymakers must balance innovation with protection for workers, particularly as zero-hour contracts face scrutiny in April."

Deputy's report further indicates that UK employment policies are expected to undergo significant shifts, spurred by technological advancements, demographic changes, and higher operational costs due to rising wages and potential regulatory changes such as the 'Right to Disconnect' policy. These factors present challenges and necessitate strategic planning by both businesses and policymakers to ensure a resilient, forward-looking economy.