Retailers face pressure and expect more job cuts ahead

The warning comes just a day after WH Smith became the latest chain to report a fall in sales due to the heavy snowfall during the run-up to Christmas.

Figures from the BRC show that 38 per cent of shops plan to cut staff over the next quarter, up from just 13 per cent at this point a year ago.

But the total masked a mixture picture, with non-food retailers saying they were looking to reduce their wage bill but food retailers proclaiming that they continued to grow their headcounts.

The survey also found that the number of hours worked by retail staff fell by 1.5 per cent during December - equivalent to a fall of about 10,300 full-time jobs year-on-year.

December's figures bucked the trend for the final quarter of 2010, with the total number of jobs growing by 0.6 per cent during the three months.

Stephen Robertson, the BRC's director general, said: "This mixed and uncertain picture underlines the need for a strong political focus on growth and a Budget that reduces burdens on business."

Christina Tolvas-Vincent, head of retail employment at business law firm Bond Pearce, questioned the retail sector's ability to soak up the looming public sector job cuts.

A raft of retailers have reported disappointing Christmas sales figures in recent weeks, with Clinton Cards, Mothercare, Next and Comet-owner Kesa all listing snow as a factor.

But food retailers - include Asda, Sainsbury's and Tesco - shrugged off the wintry weather to post growth in their sales.

The snow and ice was also a factor for WH Smith, which yesterday said like-for-like sales at its high street stores slumped 7 per cent in the eight weeks to 22 January.

At its outlets in railway stations, airports and other travel hubs, the company reported a 3 per cent drop in the 21 weeks to the same date.

But WH Smith accompanied the gloomy sales figures with a better-than-expected update on margins as it focuses on costs and more profitable stock.

Chief executive Kate Swann described the performance of both divisions as resilient and said the company remained on track to meet expectations.

She added: "Our staff worked extremely hard during this period to maintain the best possible service for our customers.

"Looking ahead, we expect the trading environment to remain challenging and we have planned accordingly."

The group's like-for-like sales have declined in recent months as the company moves away from lower-margin entertainment items such as CDs and DVDs and concentrates on selling its core range of confectionery and stationery.Peter Smedley, an analyst at Charles Stanley Securities Research, said the sales declines were worse than expected but improvements to margins and tight cost control helped deliver an update in line with his expectations.

Analysts predict WH Smith will make 93 million pre-tax profits in the year to August 2011, a 4.5 per cent increase on the previous year.

The firm reported that sales of books recommended by the Richard and Judy television book club were strong, with Sister by Rosamund Lupton and The Postmistress by Sarah Blake among the best sellers.