The British Retail Consortium (BRC) predicted that “structural change” such as slowing growth of retail sales and the “digital transformation” of the industry.

Government measures such as the National Living Wage could lead to an acceleration of store closures and the scrapping of 900,000 jobs over the next nine years. 

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BRC Chief Executive, Helen Dickinson, said: “The key conclusions of today’s report are not surprising – there will be a further contraction in retail space and a reduction in the number of people employed in retail. Individual retailers will find their own paths to 2020 and beyond but from an industry perspective, we hope to see technology and competition resulting in better experiences for the customer and better jobs for those working in retail.”

“From a government perspective the more significant insights in this report lie in where and how these changes may happen and the differential impact they are likely to have on people and places across the country and we would like to work with government to manage the impact of the changes on the most vulnerable.”

The National Living Wage — a £7.20 an hour minimum for workers over 25 announced by George Osborne last year — alone will cost retailers between £1 billion and £3 billion annually by 2020, according to the BRC’s calculations.

Increases in business rates and the apprenticeship levy, another of Osborne’s newer measures, will add costs of £400 million on top of that.

Automation could also trigger roles being displaced at a rate of 37,000 jobs a year.

It also suggests that store closures on UK high streets and town centres could exacerbate the impact on employment in already fragile communities with weaker regions and the most vulnerable low paid staff most at risk.

Encouragingly, the result will see improvements in the quality and variety of the offer to customers, continuing competitiveness in pricing and greater productivity from fewer but better jobs.

Chairman of the BRC and John Lewis Partnership, Sir Charlie Mayfield, said: “What matters is who and where will be affected most by all this change. These are the valleys to cross and the path through them needs to be chartered with care.”

“The report reaches some positive conclusions. Customers will get better choice, better value, more convenience and more personalisation. Retailing will be more productive, powered by better jobs thatoffer the chance to develop a wide array of skills and greater earnings. Not because of the National Living Wage, but because differentiation between competing retailers will depend on it.”

The report is based on detailed research and modelling across the industry, involving the most senior executives in retail businesses, and considers the implications for jobs in the industry, the profile and aspirations of the workforce to 2020 and beyond.

Sir Ian Cheshire, Chairman, Debenhams plc, said: “There is no doubt the structure of the retail industry is changing fast and there will be fewer retail jobs in the future. Retailers will get on with the job in hand.

“But ensuring that proper account is taken of the potential impact of this change, particularly on different parts of the country and more vulnerable people in the workforce requires the Government and the industry to work together in a new way. We want the jobs that remain to be better jobs and the way in which the National Living Wage, the Apprenticeship levy and the vital reform of the business rates system are implemented is absolutely crucial.”