Retail wages in Scotland to rise to £16.72 per hour from 1 April SGF report reveals

Retail employers in Scotland will see wages increase to £16.72 per hour starting 1 April, driven by rising staff costs, according to a new report from the University of Stirling and the Scottish Grocers’ Federation (SGF).

The report highlights a rise in the National Living Wage to £12.21 per hour, a 6.7% increase from 2024/25. It also notes an increase in National Insurance Contributions (NICs) from 13.8% to 15%, alongside a reduction in the employer NI contribution threshold from £9,100 to £5,000.

The report also accounts for statutory costs like NI and holiday pay, as well as additional employment expenses such as uniforms and administrative costs. The rise to £16.72 per hour represents an increase of £1.33 compared to the previous year.

In addition, a recent survey of SGF members found that more than 97% of respondents were less likely to hire additional staff due to these wage increases. Furthermore, nine out of ten owners and managers reported working more than 55 hours per week to manage costs.

If current trends persist, the National Living Wage is on track to nearly double over the next decade—from £7.20 in 2016 to £12.21 in 2025. This could lead to price increases, reduced store opening hours, or even store closures.

Independent retailers warn of job losses and staff hour cuts due to rising costs

Pete Cheema, SGF chief executive, warned that rising costs could force some stores to “cut staff hours yet again.” He noted that some retailers were already selling their stores or exiting the business entirely.

He said: “There is no doubt that local stores employing local staff will have to think twice before taking on anyone new in the coming year. In the worst cases, it could be the final straw pushing retailers to reduce staff or even close the doors for good.

“It beggars belief that our governments, both desperate to promote economic stability and business investment, are doggedly adding to the cost of employment and crippling any potential growth.”

Professor Leigh Sparks from the University of Stirling explained that the increased costs caused by hikes in NI and the National Living Wage disproportionately affect smaller, consumer-facing businesses, rather than “larger, more capital-intensive operations”.

He added: “Whilst the headline increase in the National Living Wage is 67p per hour, the real impact through directly associated costs and the NI increase is double that at £1.33 per hour. This year’s increases follow probably the most turbulent period for decades in the costs of operating retail businesses and from which consumers and retailers are only just recovering.

“The convenience sector, providing as it does a vital, local, community function, needs the real business cost of employment and the implications of its rapid rise on business operations to be better understood by governments.”

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