Competition for workers among top issues for retailers in 2022: Deloitte

Canadian retailers expect competition for workers to heat up over the next 12 months as the country's jobless rate hits record lows.

A new survey by Deloitte Canada found the fight for talent is expected to emerge as one of the greatest hurdles over the coming year, with 77% of retailers polled saying they believe it will be tough to hold on to their best employees.

Labour shortages are expected to be most acute in store operations, customer service and IT departments, Deloitte's 2022 Canadian retail outlook found.

Canada's unemployment rate dropped to 5.3% in March, the lowest jobless rate since comparable data became available in 1976, Statistics Canada said last week.

Meanwhile, supply chain difficulties remain top of mind for retailers, with 87% saying worsening supply chains are the biggest risk for 2022.

The vast majority of retailers said they expected customers to prioritize stock availability over brand or store loyalty, making the avoidance of so-called stock-outs—when inventory or products are out of stock—a top priority.

Almost two-thirds of retailers polled said they planned to diversify their overseas supplier network, while 10% said they would reduce their reliance on overseas vendors altogether.

The poll also found retailers generally upbeat about revenue growth, but concerned about margin erosion amid high inflation.

In all, 77% of retailers surveyed said they expected revenue to rise in 2022, but 40% said they expected margins to fall.

Retailers also believe environmental, social and governance (ESG) standards will become increasingly important, with 63% expecting employees are more likely to prefer working for a retailer with clear ESG goals.

The Deloitte survey also found 70% of retailers expect staff-free, cashierless stores to be common within a decade.