Government Must Do More to Mitigate Damaging Impact of Rising Wage Costs

Written by Chris Noice

ACS (the Association of Convenience Stores) has called on the Government to do more to help with the rising cost of employment and to ensure that wage rates do not have a negative impact on job prospects.

In its annual submission to the Low Pay Commission, ACS has raised concerns about the measures that retailers are being forced to take as a result of the National Living Wage increasing to £7.50 per hour in April 2017. Key figures from the submission include:

  • More than three quarters of convenience stores (78%) have reduced the number of staff hours in their business
  • Almost half (48%) have had to reduce the number of staff they employ in store
  • Almost two thirds (65%) of store owners have had to increase the number of hours they work themselves
  • 78% of convenience stores believe that the increase in the National Living Wage in April 2017 has made their business less profitable

ACS chief executive James Lowman said: “Increases to wage rates have had a significant effect on the convenience sector, with jobs being lost and already overworked store owners having to pick up more hours themselves to make up the shortfall. We urge the Low Pay Commission to take into account the negative impact that wage rises are having on businesses, and to ensure that any future rises in the National Living Wage do not damage UK employment prospects.”

When asked about future wage rates, 75% of respondents to the National Living Wage survey said that they would like a freeze in the National Living Wage next year. The Government’s current target is for the National Living Wage to reach 60% of median earnings (currently projected at £8.75 per hour) by 2020.

Mr Lowman continued: “Outside of the wage rates themselves, the Government needs to do more to help mitigate the impact of rising wage costs. Helping with the £33.7m annual cost of statutory sick pay, reducing the cost of business rates and extending the Employment Allowance should all be considered as effective ways to help businesses continue to trade. If nothing is done and businesses are faced with continued annual hikes in the National Living Wage and Minimum Wage, product costs will increase, employment will fall and ultimately, some businesses will be forced to close as a result.”

The convenience sector currently employs around 390,000 people in over 50,000 stores around the UK. ACS will be giving oral evidence to the Low Pay Commission on July 18th.

 

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