Mandatory living wage will be “devastating” for small shops, ACS warns

The Association of Convenience Stores ASC has branded the Government’s decision to introduce a mandatory living wage for workers over 25 a “reckless measure”.

The policy was announced in last week’s Budget, along with plans to relax Sunday trading restrictions.

ACS chief executive, James Lowman, said: “The introduction of a compulsory ‘Living Wage’ will have a devastating impact on thousands of convenience stores.”

Lowman added: “Let’s be absolutely clear: some retailers will not be able to afford this increase in their biggest cost. We try not to cry wolf and claim that one policy measure will close all shops, but we have very clear evidence that retailers will react to this by cutting staff hours and jobs, and yes, some will close. It’s the businesses who are growing, making the £177m investments by our sector in the second quarter of this year, who will be hit hardest.

“We support the establishment of a floor below which wages should not fall. Should that floor be £6.50, £6.70 as it will be from October, £7.20 as it will be from April 2016, £9 as George Osborne wants to see by 2020, or a different figure?  I think that’s a call better made by an independent Low Pay Commission than by a chancellor driven as much by politics as economics.”

NAHS chair, Gary Trickett, sees the development as part of “the growing cost of being a retailer”. He told NPN: “My guess is that the majority of my fellow retailers will be paying staff the minimum wage. But that has already gone up 6% over the last three years. Whether businesses like ours – with very controlled profits – can afford it or not, we’ve got to put wages up. I don’t dispute that the minimum wage should be higher, but If you add in employer contributions to the working pension scheme then you see some significant increases in costs for small retailers. You’re creating conditions that make it difficult to think about opening new stores.”