Diversity and inclusion in UK retail: where are we now and what comes next?

Depending on which research you believe, women control 70% to 80% of retail purchasing decisions. And yet, leadership in the UK retail industry remains very much male dominated. Likewise, retail leadership is hugely non-representative of the UK population in terms of race, ethnicity, disability and social status.

In our first-of-its-kind report, published this week in partnership with the BRC and PwC, we provide detailed insights on the state of diversity and inclusion in the retail sector, combining qualitative and quantitative data gathered by The MBS Group from conversations with over 100 Chairs, CEOs and HRDs, with a survey of over 1,000 retail employees from across the industry conducted by PwC.

Our findings show that whilst diversity and inclusion is high on the agenda for many retailers (89% of companies either have a D&I strategy in place, or are in the process of establishing one) this is not – as yet – reflected in diverse leadership across the sector:

– Just 9.6% of CEOs, 11.4% of CFOs and 4.3% of Chairs are women – and the majority of these leadership roles are not in the largest companies in our sector. Overall, 64.3% of the retail workforce is female.

– One in five retailers still have no women at all on their Boards, and 15% have no women on their executive committees. ​

– Overall, the retail sector is, however, close to achieving the Hampton-Alexander target of 33% women on Boards. Female representation reaches 32.6% on Boards, 32.0% on executive committees and 37.5% at direct reports level.

– Our survey found 13% of female retail employees have experienced or seen sexual harassment at work and 14% have experienced gender discrimination – and worryingly, a significant proportion of this comes from management.

When we look at race and ethnicity, the picture is even less positive. 12.5% of the UK population is from an ethnic minority background – and yet retail has very few ethnic minority leaders:

– Ethnic minority representation reaches 4.5% on Boards, 5.8% on executive committees and 6.0% at direct reports level. Note that these figures are skewed by a number of retailers owned by Asian families, with all-Asian Boards and executive committees.

– 81% of retailers have no NEDs from ethnic minority backgrounds, and 68% have all-white executive committees.

– There are very few Black leaders within the sector

– One in four retail workers surveyed from ethnic minorities are reported to have experienced or witnessed racism in the workplace.

Likewise, beyond gender and race, the sector also needs to make progress on other areas of diversity to become representative of the customers we serve:

– Only 27% of retailers reported having at least one visible LGBTQ+ leader within the top two levels of executive leaders.

Just 7% of retailers reported having at least one disabled leader within the top two levels of executive leaders. Less than 1% of executive committee members are physically disabled. This compares to official figures which show that 19% of the working age population is disabled in the UK.

So why are we where we are? There are of course retailers leading the way on creating diverse and inclusive businesses. However, like many sectors emerging from Covid-19, when you look at retail overall, the data suggests the sector is not giving D&I the attention it requires. While most organisations do have a coordinated D&I strategy, policies are often not being underpinned by appropriate budgets or wholehearted engagement and committed leadership from the Board. As a result, D&I strategies are not being felt by shop-floor employees, and consequently senior teams remain largely homogenous.

Nevertheless, the strong engagement and attendance we received from the industry at our public launch event, as well as in discussion sessions for key stakeholder groups such as CEOs, HR directors and non-executive Board members, indicates that this is already top of mind for many retailers.

Strikingly, however, our research also shows that engagement on the topic of D&I at executive committee level is neither mirrored by the Board nor being felt on the shop floor. A large majority (84%) of retailers say that D&I is a business priority, but conversations with NEDs from across the retail sector revealed that D&I is – in most retail businesses – not a key item on the Board agenda. Particularly now, commercial performance is being prioritised over the longer-term topic of diversity.

Concerningly from an employee engagement perspective, PwC’s research as part of this report reveals that only half (51%) of retail employees believe D&I is sufficiently high on their employer’s agenda, and less than half (47%) believe that their employer communicates about D&I. These findings paint a stark picture, clearly demonstrating that executive team engagement on the issue of D&I is not enough. Businesses must now turn policy into action, and ensure that the strategies in place have a practical impact on the entire workforce – and indeed that the retail sector overall can attract the best diverse talent going forward.

Reflecting on her experience at our launch event, Sarah Miles, CEO of online beauty retailer Feelunique, reaffirmed her desire to get the whole workforce engaged in D&I, telling us that “To gain real momentum, we need everyone on board – even the ‘undiverse’. There’s power in data and plans, but they are table stakes – real change comes from the grassroots heart of the business”. Jo Whitfield, CEO of Co-op Food, similarly shared her own approach: “Every room I go into, whether virtual or physical, I take the time to notice who’s not there. Take time to identify the gaps and create space for those people: listen to the silent voice”.

Our conversations with leaders across the sector showed that the businesses furthest ahead on D&I were those who understand the vital partnership of inclusion and diversity – not just one or the other. Across the retail sector and beyond, many forward-looking businesses have taken this approach, with the understanding that truly inclusive cultures not only lead to diversity, but also that they drive meaningful, positive change that can be sustained in the long term. Indeed, achieving diversity at the most senior levels does not necessarily mean a company is inclusive, and a singular focus on meeting representation targets can distract from solving deep-rooted issues that exist further down the organisation.

If we see inclusivity as a task, we’ll never get there. But if we take it as a core value, values create behaviours and behaviours create cultural shift” Rachel Osborne, CEO, Ted Baker

The report also lays out actions retailers can take to move from intent to action, providing a series of practical recommendations in four areas:

Leadership from the top

One barrier to progress is insufficient ownership and accountability on D&I. The furthest-ahead retailers are those in which diversity is not an ‘HR issue’, but a priority for the Board and the executive committee. In the ‘gold-star’ retailers, D&I is factored into long-term commercial strategy and driven by the Board, who apply sufficient governance to ensure this sits at the top of the CEO’s agenda.

As a leader, my role is to create an environment within which an inclusive culture can thrive. Always be open to education, be curious, challenge your assumptions and keep on listening” David Wood, CEO, Wickes

Data and reporting

While mandatory gender pay gap reporting has forced retailers to take action on gathering gender data, information remains incomplete on most other areas. With the understanding that what gets measures gets done, businesses should prioritise data collection on areas such as returning parents, ethnicity and disability.

Working practices

There are countless practical steps that businesses can take to embed D&I into their organisation. From reviewing hiring processes to reimagining incentivisation policies, the furthest-ahead retailers are considering every practical policy with a D&I lens.


D&I should be felt right the way through the business. Setting up employee networks, partnering with external organisations such as Pride and considering putting an employee on the Board can go a long way to fostering an inclusive workplace.

I believe that one of the (only!) Covid ‘dividends’ is that, by working virtually, colleagues have been provided with the space and opportunity to be more open than might be the case in a physical environment. We now have executive committee members sponsoring virtual forums on each aspect of diversity; this enables colleagues throughout the company to openly participate and share their experiences. This inclusive approach can only lead to positive changes in attitudes and a better appreciation of all aspects of diversity” Dennis Millard, Deputy Chairman, Pets at Home

Our objective for this report was simple: to hold a mirror up to the retail industry and present the true state of diversity and inclusion. What we found is that there is still a very long way to go. We need to do more to drive up female and diverse representation in the most senior positions. This will, in turn, lead to more diverse teams, more inclusive innovation and better products and customer experiences that drive loyalty and profitability.

The past year has certainly been one of the most turbulent periods for the retail industry since the Second World War, so it is understandable that D&I may not be at the top of every retailer’s agenda. But this is not the time to lose focus. Achieving D&I is not only right morally, but a commercial imperative for retailers as they emerge from the Covid-19 crisis. In short, we need to build back better.

The MBS Group will continue to be an advocate of diversity and inclusion, and it is our hope that this report will play some small part in driving positive change across the industry. The retail sector employs over three million people in the UK, and contributes £403bn to our economy. This is too important an issue for us not to get right.

Download your copy of the report here.

Elliott.goldstein@thembsgroup.co.uk | @TheMBSGroup