Living wage could ‘devastate' small retailers and push up prices
Posted on in Business News , Political News
Retail analysts believe higher wage is out of reach for many independent stores, while major retailers say other staff benefits would have to be cut.
Revealed in the Budget, as of April 2016, the Government is introducing a new minimum wage of £7.20, which will rise to £9 by 2020.
Store executives and industry experts said that the retail sector, which employs vast numbers of staff on or just above the national minimum wage, would be forced to cut jobs, reduce staff working hours and pass on additional costs to their shoppers when the wage, announced in Wednesday's budget, is introduced next April at £7.20 an hour for the over-25s.
The Association of Convenience Stores, which represents thousands of small independent grocery outlets, said its members were likely to have to reduce the number of hours that their staff work, cancel investment plans or work more hours in their business themselves.
James Lowman, the chief executive, said: "The introduction of a compulsory living wage will have a devastating impact on thousands of convenience stores ... to introduce this undermines the independent Low Pay Commission and is a reckless way to impose a massive burden on small businesses."
Bruno Monteyne, a retail analyst at research firm Bernstein, said: "Retailers are not magic machines that eat up inflation. Ultimately the consumer will pay for the increase in wages."
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