Retail Closures and Downsizing in 2025: The Impact on Employees
In 2025, the UK retail sector continues to face significant disruption. Several big-name retailers, including Wilko, Marks & Spencer, Boots, John Lewis, H&M, Quiz, and others, have announced store closures or downsizing plans. These shifts are largely driven by changing consumer habits, the rise of online shopping, and ongoing economic pressures. But beyond the financial aspects, these closures raise important employment law considerations for both employers and employees. Let’s explore the legal implications of these changes and what affected employees need to know.
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Redundancy Rights
One of the primary concerns for employees facing store closures is redundancy. When a retailer decides to close a store or downsize, affected employees may be made redundant. In the UK, employees who have been employed for at least two years are entitled to redundancy pay, which depends on the length of service, age, and salary.
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Statutory Redundancy Pay: Employees are entitled to a statutory redundancy payment based on their age and years of service. For example, employees aged 22 to 41 are entitled to one week’s salary for each year of service, up to a maximum of £643 per week as of 2025.
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Consultation Period: Under UK employment law, employers must consult with employees about potential redundancies if they’re making 20 or more employees redundant within 90 days at a single establishment. This consultation process must last at least 30 days for smaller-scale redundancies or 45 days for large-scale redundancies.
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The Right to Redeployment
Employers are also required to explore redeployment options for employees whose roles are at risk. For retailers like Marks & Spencer, John Lewis, and Boots, this could mean offering affected employees positions at other locations or within different departments if possible.
However, not all employees will be willing or able to relocate. If redeployment options are offered, they must be reasonable, and employees can reject them in certain circumstances. Employees who are not offered a suitable alternative role and face redundancy have the right to challenge the process if it isn’t handled correctly.
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Employment Contracts and Severance
When an employee is made redundant, they may also be entitled to receive notice pay, depending on their employment contract. Most employees have a notice period defined in their contract, which typically ranges from one week to a few months, depending on their length of service. Employers who fail to provide notice or pay for this period may be in breach of contract.
Additionally, if the closure leads to an immediate layoff or redundancy without proper notice, employees could have grounds for a constructive dismissal claim. This is where an employee is forced to resign due to an employer’s actions or failure to act.
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Consultation and Collective Bargaining
As mentioned earlier, retailers that are making mass redundancies (20 or more employees at a single site) are legally required to enter consultation with employees, an elected workplace representative or their trade union representatives. This is to ensure that the process is fair, transparent, and that employees have a say in how it’s carried out.
Employers are also obliged to provide clear reasons for the closures and redundancies, and must consider alternatives to dismissal. Failing to follow the correct procedure can result in claims for unfair dismissal and a protective award.
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The Future of Retail Employment: A Shift Toward Flexibility and Remote Work
As the retail sector increasingly embraces digital transformation, many businesses are focusing on online retail and click-and-collect services. This shift is resulting in changes to the types of roles available in the industry. For example, there may be more demand for positions in logistics, warehouse management, and e-commerce support roles.
Additionally, as remote work becomes more commonplace in other sectors, some retail roles—especially those in customer service or head office positions—might offer more flexible work arrangements. Retail employers might begin exploring hybrid working models for corporate teams, offering more flexibility for employees previously tied to physical store locations.
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The Role of Employment Lawyers
For many employees, navigating the redundancy process can be overwhelming. This is where employment lawyers can be invaluable. A lawyer specializing in employment law can help employees understand their rights, negotiate redundancy packages, and even represent them in claims for unfair dismissal if the process wasn’t handled correctly.
If you’re an employee affected by retail downsizing or closure, it’s always a good idea to seek professional legal advice to ensure your rights are fully protected and to help you understand your options.
Conclusion
The wave of retail closures and downsizing in 2025 is a stark reminder of the changing landscape of the UK retail industry. While these decisions may help companies stay afloat amidst challenging economic conditions, they have significant consequences for employees who face uncertainty and potential job loss. As these changes unfold, employers must adhere to employment laws, ensure fair treatment, and offer support during the redundancy process.
For employees, knowing your rights and seeking legal guidance can ensure you’re treated fairly during these transitions. As the retail sector evolves, it’s crucial to keep an eye on the future of work and the shifting dynamics that affect both employers and employees.
If you believe you have a situation where you require legal advice, please contact us on telephone 0116 212 1000 or 01858 445 480, alternatively fill in the free Contact Us form and we will get in touch as soon as possible.
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