The UKs largest businesses continue to dominate corporate revenues a new report showed today. Employment concentration is, however, in decline.
The report by the Resolution Foundation shows that the UKs 100 largest firms now account for 23 per cent of total revenues, up from 18.5 per cent in 2003-04.
Increasing revenue concentration has been broad based but particularly in the retail and gambling industries. The top five supermarkets have seen their revenue share increase to 74 per cent, versus 63 per cent in 2003-04, while clothing retailers have also seen a sharp increase.
One outlier is internet retail where a ninefold increase in the number of firms has meant a sharp decline in revenue concentration.
Read more: Retailers under pressure as profit warnings double to seven-year high
David Tomlinson, policy analyst at the Resolution Foundation, said that revenue concentration “is about far more than a few tech companies with the UKs leading companies taking a greater of share of the revenue pie across the economy since the early 2000s”.
The reports findings on the concentration of employment were, however, in the opposite direction. Employment is becoming less concentrated in the hands of big business.
The share of UK workers employed by the 20 biggest employers in each sector has dropped by four percentage points during the past 12 years to 42 per cent. The decline in employment concentration has been more pronounced during recent years.
Read more: Wages on downward trend in May to cast doubt on BoE rate rise prospects
The report notes that its findings cast doubt on the claim that increasing employment in the hands of a few big firms is one explanation for the UKs subdued wage growth.
“This downward shift in labour market concentration means that arguments that growing monopsony or labour market power of a few big firms have driven recent weak pay growth in the UK appear misplaced”.
Instead it highlights that a smaller share of jobs are at firms with the fastest revenue growth.
Read more: Wage growth in 2018 is predicted to come in at zero
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