Nearly half of UK retailers are investing in hiring more store staff despite rising labour costs, according to x-hoppers. The finding comes from a survey of more than 100 senior UK retail executives.
The study found that 49% of retailers are investing in frontline team growth rather than cutting back. In fashion retail, that figure rises to 86%, pointing to stronger demand for in-store staffing in a category where customer interaction often plays a larger role in sales.
The figures come as retailers face higher wage bills and tax costs. The British Retail Consortium estimates that retail employment costs rose by about £5 billion last year, adding pressure to an industry already grappling with tight margins and weaker consumer confidence in some segments.
Retailers are not limiting investment to headcount. Businesses are also spending on pay and tools designed to support shop-floor staff, reflecting a broader view that store employees remain central to customer service in physical retail.
Some large chains have already made public moves on wages. M&S announced a £70 million investment in staff pay, while Primark has increased hourly wage rates by more than 15% over the past three years.
Tech spending
The report also found that 58% of UK retailers are investing in generative AI tools for store workers, alongside systems for upskilling, knowledge-sharing and training. Adoption was higher in some sectors, with 86% of fashion retailers and 61% of electrical retailers saying they were investing in those tools.
Retailers expect to allocate an average of 25% of their in-store innovation budgets to frontline communication tools that keep store staff connected. This suggests many chains are directing a significant share of technology spending towards systems used directly by employees, rather than only to back-office operations or customer-facing self-service tools.
x-hoppers linked that investment to demand for better in-store service. In a separate consumer poll, 65% of respondents said they value store innovation that helps colleagues support their buying journey without leaving their side, while 88% said it is important for staff to be able to provide instant information in response to queries.
The findings reflect a continuing tension in retail strategy. Many chains are under pressure to control labour costs, yet they also need enough trained staff on the shop floor to maintain service standards, especially in categories where advice, reassurance or product knowledge can influence a purchase.
That may help explain why retailers are taking a dual approach: maintaining or expanding store teams while also investing in digital tools to make them more productive. In practice, that can mean equipping workers with communication devices, mobile apps, training systems and AI-based support tools to answer questions more quickly.
x-hoppers sells a retail communications system that includes wireless headsets, a mobile app, QR code-based call points and AI features designed to help staff stay in contact and respond to customer requests on the shop floor. The company is backed by Wildix, a unified communications provider.
The survey’s emphasis on employee support also points to a shift in how retailers view store technology. In recent years, much of the focus has been on self-checkout, automation and digital channels. The latest data suggests many businesses are now also directing spending towards systems designed to support human service rather than replace it.
That matters for bricks-and-mortar retailers trying to justify the role of stores in an increasingly digital market. Physical shops are often expected to do more than process transactions, serving instead as places for product discovery, brand experience, click-and-collect and customer advice. In that context, staff can become a differentiating factor.
Graham Dixon, Chief Technology Officer at x-hoppers, said the findings show retailers still see store workers as central to the shopping experience. “Retailers recognise that store staff ‘make or break’ shoppers’ experiences in-store – and delivering that requires engaged, empowered teams,” he said.
Technology investment is being framed as support for those teams rather than a substitute for them, he added. “As brands continue to invest in human capital, just as crucial is their commitment to connectivity and innovation, which enhance rather than replace human interaction in-store,” Dixon said.
