ACS (the Association of Convenience Stores) has responded to the Low Pay Commission’s consultation on the future rates of the National Minimum Wage and National Living Wage, calling on the Commission to take into consideration the impact of wage hikes on local shops.
In the submission, ACS raises concerns about the target that the Low Pay Commission was set by the former Chancellor George Osborne of raising the National Living Wage to 60% of median earnings by 2020, calling for the Commission to have its independence in considering future wage rates reinstated.
ACS chief executive James Lowman said: “The introduction of the National Living Wage in April this year has already put significant pressure on convenience store owners, leading to many delaying their investment plans and ultimately reducing the number of staff hours in their business. We have significant concerns that the planned rises in wage rates over the next four years will result in the closure of stores, depriving communities of essential services and costing jobs.
“Under the current system, the Low Pay Commission is being forced to recommend wage rates to reach a political milestone, as opposed to purely as a result of economic deliberation and analysis of what cost increases businesses can deal with. We urge the Government to give the Low Pay Commission full independence in making recommendations for future wage rates, both on the National Minimum Wage and the National Living Wage.
ACS’ annual survey of retailers on wage rates revealed that many are taking on more hours in the business themselves to cut costs and lower their overall wage bills. However, those with more than one store were more heavily affected as they are unable to split their extra time between different stores. These businesses are more likely to have to make other cost savings like reducing overall paid working hours and scrapping investment plans, resulting in the business becoming less competitive in the long term.
The 2016 Living Wage Survey showed:
- 15% of retailers believe that the introduction of the National Living Wage has made their business less competitive
- 43% of retailers report that the introduction of the National Living Wage has had a negative impact on their business expansion or investment plans
- 74% of retailers have reduced the number of staff hours in their business as a result of the introduction of the National Living Wage
The full submission to the Low Pay Commission is available in the Submissions section of the ACS website.
