A government advisory body has recommended the national living wage increases to £12.10 per hour from April next year.
The current national living wage, of £11.44 per hour, is the threshold for workers aged over 21, with lower rates applied to those aged 18 to 21. The lowest rate is £8.60.
The above-inflation pay rise, advised by the Low Pay Commission, is set to align with earnings growth, but it is higher than its March’s estimate of 3.9%.
Mo Razzaq, president of the Fed, said the wage increase would be a “step too far for hard-pressured small businesses”.
He said: “Small independent retailers are the backbone of their communities and as responsible employers we want to ensure we are paying a fair wage to our staff. [But]as well as paying our staff more in wages, we must pay more in national insurance and pension costs, at a time when many other costs, including energy costs, are rising.
“There is no easy way for small retailers to combat these increases. As so many of the products that convenience store owners stock are price marked, we cannot pass these costs onto our customers. The only solution available to independent shop owners is to reduce staff hours and staff numbers and, somehow, take on even more hours ourselves.”
Fed calls on government to protect shop owners as living wage rises
Retailer reactions
Jai Singh, of MJ’s Local in Parsons Cross, Sheffield, said retailers will be left to “choose other avenues to increase margins to counteract the wage increases, such as pushing the latest trends or products”.
“Every indie or symbol retailer has to get on with it, but it feels like there is an outpouring of sympathy with hospitality trade when things aren’t working, and not so much for us,” he added.
“We want a the welfare of our employees protected, but it’s not a level playing field. We’re a crucial part of the community, and get respect, but it’s not backed up with evidence. We’re seeing attacks on shopkeepers and rising thefts, plus the purchasing model for small stores is in the power of the big supermarkets, with their economies of scale.”
Trudy Davies, of Woosnam & Davies News in Powys, Wales, said the news is “worrying”, and comes “at the retailer’s expense”.
“Although I’m fully aware you need decent pay for a decent day’s work, we’re at a critical point where people are paying the minimum wage, but there are people like me paying over the minimum wage,” she continued. “An increases on this sends a signal out to people not on minimum wage that they should have a pay rise too. It puts pressure on everyone, and it comes out of our wages and profits. The margin between profit and whether it’s worth having a shop is getting less and less. Prices will increase.”
Despite pledging to remove “discriminatory” age bands for the National Living Wage, in July the Labour government asked the Low Pay Commission to establish a separate pay rate for 18-to-20-year-olds in 2025, but with a view to removing age bands for the minimum rate in the future.
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