Retail jobs declined by 23,000 in September, compared to the same month last year, according to the latest BRC-Bond Pearce Retail Employment Monitor.
In the third quarter of 2011, retail employment was down by 0.8% year-on-year, the equivalent of 5,780 fewer full-time jobs and the sharpest quarterly fall recorded since the Monitor started annual comparisons in October 2009.
During the same period, the number of retail outlets grew by 2.3%, almost entirely driven by grocery retailers. The overall decline in the number of full-time workers was driven by non-food retailers, while part-time workers experienced the largest decline in hours worked.
BRC director general Stephen Robertson said: "With consumer spending now in recession and retail sales volumes declining, this is the biggest drop in overall retail employment in the two years since we began this survey. Redundancy rates are thankfully low but many retailers are not filling every vacancy.
"Uncertainty and fears about Christmas trading may also be leading retailers to delay taking on this year's seasonal staff - with that reluctance compounded by the new Agency Workers rules."
Looking forward to Q4, The Monitor shows 54% of retailers say they will increase staffing levels in the run-up to Christmas, compared with 61% last year. More than a third said they would keep levels the same, while 8% intend to decrease staff numbers.
The BRC says the Government should bring in a moratorium on new employment regulation to help restore confidence and jobs growth.