New Year's Day trading consultation - economic impact and impact on family life: report

6. Social Impact of New Year's Day Closure of Large Retail Stores

It could be argued that the social benefit of increased public holidays, and other fair work principles, outweighs the potential economic impact in terms of wellbeing. While many large retailers are opposed to their stores closing on New Year's Day, many of their employees appear to have the opposite opinion. This is evident through the consultation responses from employees (see the consultation report published alongside this paper) and other similar surveys undertaken asking retail staff if they want to take certain holidays^[28].

A quarterly survey undertaken by YouGov measures New Year's Eve's popularity and fame based on 4,500 nationally representative interviews of Great Britain's (GB) population^[29]. Equivalent results are not available for New Year's Day, but those who celebrate New Year's Eve are arguably more likely to like the subsequent day's holiday. Results for Q2 2021 found that 59% of respondents liked the holiday while 13% disliked it and 25% were neutral. Popularity increased by age with 59% of millennials liking the holiday compared to 55% of baby boomers. Women were also more likely to like the holiday more than men. 62% of women liked the holiday compared to 57% of men. Data for Scotland is not available.

Another survey undertaken by YouGov asked the public if they celebrated certain holidays^[30]. 61% of the Scottish public celebrate New Year, in line with GB as a whole. Residents of Scotland, however, were more likely to rate the holiday as very important to them compared to GB as a whole (17% compared to 11% for GB as a whole).

The Union of Shop, Distributive and Allied Workers (Usdaw) undertook a survey in 2019 of more than 12,000 of its members who are shop workers^[31]. This survey found that 97% of respondents opposed Boxing Day trading and 98% wanted stores to close early on Christmas Eve. The union has also campaigned for New Year's Day to be a holiday and for stores to close by 4 p.m. on New Year's Eve (Hogmanay). A separate survey of Scottish retail workers found that only 3% of them were happy to work on New Year's Day^[32]. A key issue highlighted in the survey was the lack of public transport during the festive season that impacts shop workers who rely on it to get home.

Wellbeing gain

The UK's minimum of eight public holidays a year is very low by international standards. Research published by Mercer HR suggested there was a statutory minimum of 14 in Spain, 13 in Portugal, 12 in Greece, 11 in France, and 9 in Germany and Ireland^[33]. Outside Europe, it found US and Australian workers get 10 public holidays, Canadians 9, Chinese 11 and Japanese 15. However, there are regional variations in many of these countries and employment laws differ as to whether workers should be paid for these holidays.

The benefits of holidays to employees' mental health and safety is promoted by health charities^[34]. Research also sets out the benefits to businesses of time off and shorter working weeks for staff job retention, increased productivity, engagement and motivation^[35]. A recent study by WHO found that working long hours increases heart disease and stroke^[36].

Increased adoption of fair work principles, as defined by the Scottish Government, in general aim to improve the wellbeing of employees by improving security, respect, opportunity, fulfilment and effective voice. International evidence shows that implementing such fair work leads to improved outcomes, such as improved mental wellbeing, reduced in-work poverty, increased real wage growth, and increased productivity^[37]. This is backed by recent analysis that found that higher employee wellbeing is associated with higher productivity and firm performance, including customer loyalty, profitability and staff turnover^[38].

The Covid-19 pandemic has also had a profound impact on both the population's health and wellbeing. A particular issue relating to wellbeing was the restrictions on seeing friends and family during lockdown periods and the resulting mental health impacts. Many retail employees were classed as key workers if they worked in stores defined as essential retail (e.g. food retail), so were required to work in an often stressful environment. New results from a Mental Health Foundation study show that one year on, the crisis has had wide and deep emotional impacts on Scottish adults^[39]. According to the survey, the share of Scottish adults reporting that they were lonely has risen from 11% of those surveyed in March 2020 to 29% in February 2021. Young adults (18-24 year olds), full-time students, single parents, people who are unemployed and those with pre-existing problems with their mental health are significantly more likely to be feeling distressed, across a range of measures, compared with Scottish adults generally.

The Scottish Government published a report in December 2020 setting out how the pandemic has affected progress towards Scotland's National Outcomes^[40]. It was found that isolation and loneliness have established impacts on health outcomes and during lockdown periods loneliness increased dramatically with 40% reporting feeling lonely compared to 21% pre-Covid-19. Young people and women in particular found the restrictions on socialising and meeting with friends and family difficult. Other groups, such as those who were shielding, also found lockdown had negatively impacted on their life even when they thought they were coping well. A recent update to the Covid-19 Mental Health Tracker Study covering the period 4 February to 9 March 2021 found the mean score for loneliness was 5.01 out of a maximum of 9 (where a higher score means higher loneliness), which is the highest reported across the pandemic^[41].

Many large retailers have already committed to closing stores during holiday periods as a thank you to their staff for working during the pandemic. Large retailers such as Asda, Marks & Spencer, Aldi, Lidl, and Pets at Home closed on Boxing Day 2020 (26 December) to give their staff a day off. Other retailers such as Tesco, Sainsbury's and Morrisons remained open, but offered benefits to staff such as reduced opening hours, bonuses and increased pay^[42]. However, Morrisons, Sainsbury's and other large retailers have announced that their stores will be closed on Boxing Day 2021 to reward staff^[43]. This demonstrates that many large retailers have acknowledged the benefit to their employees of having an additional holiday to relax, and providing the opportunity to spend the day with their family and friends.

Impact on employee pay

While many employees would welcome an additional day off and the opportunity to spend New Year's Day with friends and family, holidays, pay and overtime are contractual agreements between employees and employers and the Act does not require that the day is a paid holiday. This may particularly impact employees with part time or casual contracts who may rely on working on a holiday date for additional pay.

Employees in the retail sector are paid less than average and are less likely to earn the real living wage than the average for all industries in Scotland. In 2019, 42.5% of employees aged 18+ in the wholesale, retail, repair of vehicle industry (SIC Section G) earned less than the real living wage (£9.00), compared with 16.9% of all employees in Scotland^[44].

Median weekly pay – excluding overtime – for full-time employee jobs in the retail industry (SIC 2007 – division 47) in Scotland was £393 in April 2020. This is significantly lower than the equivalent median value across all industries and services in Scotland, which stood at £576. Part-time employees in the retail industry earned £159 compared to £212 across all industries and services in Scotland.

Pay was lower for those employed in the retail sector across all measures of pay (hourly, annual etc.) as seen in the following table.

Median Employee Pay by Industry, Scotland

	Median Weekly Pay (excluding overtime), £		Median Overtime Pay, £		Median Gross Hourly Pay, £		Median Gross Annual Pay, £
	Full-time	Part-time	Full-time	Part-time	Full-time	Part-time	Full-time	Part-time
Retail (SIC 47)	392.9	158.6	*	*	10.10	9.18	20,784	9,544
Scotland All Service Industries	580.8	210.8	49.9	30.7	15.91	10.77	31,027	11,772
Scotland Total	575.7	212.3	53.1	31.0	15.62	10.82	31,605	11,920

Source: Annual Survey of Hours and Earnings 2020

* Data disclosive

Men that are in full-time employment in the retail sector in Scotland earn more than women in terms of median weekly pay (excluding overtime). Men earn £423 per week compared to £364 for women. Women, however, earn slightly more than men when looking at median weekly pay (excluding overtime) for part-time employees.

Median Employee Pay by Industry and gender, Scotland

	Full-time Median Weekly Pay (excluding overtime), £		Part-time Median Weekly Pay (excluding overtime), £
	Male	Female	Male	Female
Retail (SIC 47)	422.9	364.2	151.8	159.5
Scotland All Service Industries	606.6	558.4	183.9	219.9
Scotland Total	594.1	552.6	185.5	221.2

Source: Annual Survey of Hours and Earnings 2020

Median weekly paid hours worked by employees in the retail sector are broadly in line with the average for all service industries and all industries in Scotland. While slight, retail employees were more likely to work longer hours than average if they were on a full-time contract, but less likely to work more hours than average if they were part-time. Overtime hours worked by retail employees is disclosive, however the average for service industries as a whole was three hours every week.

Weekly Paid Hours Worked by Industry, Scotland

	Median Paid hours worked total		Median Paid hours worked Basic		Median Overtime Hours Worked
	Full-time	Part-time	Full-time	Part-time	Full-time	Part-time
Retail (SIC 47)	38.2	19.3	37.5	16.7	*	*
Scotland All Service Industries	37.5	20.0	37.0	19.1	3.0	3.0
Scotland Total	37.5	20.0	37.4	19.3	3.1	3.0

Source: Annual Survey of Hours and Earnings 2020

* Data disclosive

Men work more hours per week in the retail sector for both full-time and part-time work compared to women. The median paid hour worked total for men in full-time employment in retail was 39.0 hours compared to 37.5 for women. Men in part-time employment worked 20 hours compared to 18.6 for women.

Weekly Paid Hours Worked by Industry and Gender, Scotland

	Full-time Median Paid hours worked total		Median Paid hours worked Basic
	Male	Female	Male	Female
Retail (SIC 47)	39.0	37.5	20.0	18.6
Scotland All Service Industries	37.5	37.0	18.0	20.0
Scotland Total	37.5	37.0	18.0	20.0

Source: Annual Survey of Hours and Earnings 2020

The gender pay gapmedianfor theretail sector in Scotland stood at 5.8 in 2020 compared to 10.9 for Scotland as a whole. The gender pay gap is estimated here as the difference between average hourly earnings (excluding overtime) of men and women as a proportion of average hourly earnings of men. In this case, a median gender pay gap of 5.8 for the retail sector means that women earn 5.8% less, on average, than men.

The chart on the following page sets out the sectors with the highest concentration of zero-hour contracts in the UK (data for Scotland not available by sector). In the period April to June 2021, 10% of employees were on zero hours contracts in the wholesale and retail sector in the UK compared to 23% in admin and support services and 21% in accommodation and food. Furthermore, large employers are more likely to make use of zero hours contracts than smaller firms. In November 2017, 28% of employers with at least 250 employees made some use of zero hours contracts, compared with 5% of employers with fewer than 10 employees^[45].

Around a third (34%) of workers in the UK on zero hours contracts were aged 16-24 and 57% were women in April-June 2021. In Scotland, 2.3% of people in employment were on a zero hours contract compared to 2.8% for the UK as a whole.

Source: ONS Labour Force Survey.

The chart below shows the difference in zero hours contracts by occupation within a certain industry. Managers, directors and senior officials (2%) are least likely to have a zero hour contract whereas sales and customer service occupations and process, plant and machine operatives are more likely (both 8%).

Source: ONS Labour Force Survey.