Wage rises need capping to ease burden on shops

Retailers are calling on the Low Pay Commission (LPC) to cap future national living and minimum wage rises.

The LPC’s consultation into the 2017-18 wage rates launched last month.

Kay Desai, who runs a Nisa Local in Tongham, told Retail Express that the National Living Wage is a key issue for the convenience sector.

“I employ a number of people over the age of 25 in my store, so the living wage puts a substantial burden on business,” she said. “Because it isn’t capped, it will continue to go up – it could jump to £10 an hour without much warning.”

Desai added that although the wage will continue to increase, some percentages on margins will not, which means that retailers will face increasing pressure because of the living wage.

Jimmy Patel, owner of Jimmy’s Store in Northampton, said that he saw the living wage as “a key concern for the sector”, supporting Desai’s concern that falling margins from suppliers were only adding to the burden.

The ACS recently submitted evidence to the LPC that showed 65% of retailers reported having to cut hours or staff levels following the introduction of the living wage. Sixty-two per cent had to delay or cancel investments in their stores because of the new wage.

James Lowman, chief executive of the ACS, said that he would be urging the LPC to reconsider its plans to increase wages next April.

“The convenience sector is currently facing significant increases in employment costs, not just through wage increases but also as a result of the introduction of Automatic Enrolment Pensions and the Apprenticeship Levy,” he said.