The chief executive of Next (NXT.L) has warned that entry-level job opportunities across the UK have fallen sharply, with competition for retail positions doubling in just two years.
Lord Wolfson told the BBC that Next typically received 10 applicants for every shop vacancy two years ago, but that figure has since climbed to 19 per role.
“That doubling of applicants for shop jobs is indicative of just how big the crisis is in youth unemployment at the moment,” he said.
Latest official figures show unemployment among 16 to 24-year-olds stands at 16.2%, the highest level since 2014 and more than three times the general unemployment rate of 5%.
Lord Wolfson said younger workers suffer most when job numbers fall, as they lack the experience that makes them competitive against older candidates in a tighter labour market.
“Youth unemployment is really a symptom of wider problems with employment in the economy, and of course, if you’ve got fewer jobs, the people who suffer most are the people with the least experience and that is the youngest,” he said.
The Conservative peer called on the government to reverse its increase in employer National Insurance contributions and minimum wage rises, though he identified broader economic growth as the primary solution.
Next previously stated that government policies had pushed its annual wage bill up by £70m. The retailer has responded by reducing staff numbers in individual stores and increasing its use of automation, including self-scanning lockers for customer returns.
Lord Wolfson also criticised the government’s Employment Rights Act, warning that rules requiring employers to offer guaranteed hours to casual workers would complicate seasonal hiring in retail.
“You can’t afford to have the same number of people in your shop in February as you have in and around Christmas,” he said, adding the changes would hurt students seeking extra hours during holidays.
The Trades Union Congress pushed back, stating the guaranteed hours policy was “hugely popular” and that the reference period used to calculate contracts would smooth out seasonal peaks and troughs.
“This will give insecure workers on variable hours security in their working lives which they are so badly lacking at the moment,” a TUC spokesperson said.
A Treasury spokesperson said the national minimum wage increase had boosted pay for more than 200,000 young workers, and noted that employer National Insurance contributions are lower when hiring under-21s.
“Cutting wages for the lowest paid during a time of global uncertainty is not the answer,” the Treasury spokesperson said, pointing to a £2.5bn youth employment support package.
A Department for Business and Trade spokesperson noted Lord Wolfson received £7m in pay last year, and said the government’s Budget had stabilised the economy while delivering support for families and businesses.
Next has posted strong financial results despite the wider pressures, raising its full-year profit expectations to £1.2bn after recording a 6.2% rise in sales during its first quarter.
Lord Wolfson rejected suggestions that Next was prioritising shareholders over workers, arguing that profits flow to hundreds of thousands of ordinary savers rather than a single wealthy individual.
“The average dividend we’ll pay out to an individual saver will be around £300 a year,” he said, adding that profitability was essential to the retailer’s long-term survival.
Next employs more than 30,000 people and has acquired struggling brands including Joules, Fatface, Cath Kidston and Made.com in recent years as competitors have collapsed.
Lord Wolfson argued that planning reform, energy policy and transport investment would do more to stimulate hiring than targeted youth employment schemes, calling on the government to release more land for development.
He noted that an acre of agricultural land in the south-east of England costs around £15,000 but rises to as much as £1.5m once planning permission is granted.
“All of these things are holding the economy back and if government could just take its foot off the brakes, we could have a much, much faster growing economy,” he said.