Small independent retailers are expressing their concerns at the news that the National Living Wage could increase by almost 6 per cent to £12.10 an hour from April next year.
In its latest report, the Low Pay Commission (LPC) said that wages need to rise by about 5.8 per cent to align with earnings growth. This is significantly higher than its March estimate of 3.9 per cent.
Responding, Mo Razzaq, the National President of the Federation of Independent Retailers (the Fed), said: “Small independent retailers are the backbone of their communities and as responsible employers we want to ensure we are paying a fair wage to our staff. But raising the national living wage to as much as £12.10 would be a step too far for hard pressed small businesses.
“As well as paying our staff more in wages, we must pay more in national insurance and pension costs, at a time when many other costs, including energy costs, are rising. There is no easy way for small retailers to combat these increases. As so many of the products that convenience store owners are price marked, we cannot pass these costs onto our customers.
“The only solution available to independent shop owners is to reduce staff hours and staff numbers and, somehow, take on even more hours ourselves.”
The 5.8 per cent increase was projected after the new Labour government updated the LPC's remit to formally factor in the "cost of living" when undertaking the annual review into the minimum wage. Its recommendations will be delivered next month.
Last month, Mr Razzaq wrote to the new business secretary Jonathan Reynolds to highlight the impact of higher wages on smaller businesses.
In his letter, Mr Razzaq said the Fed recognised the importance of providing a living wage for those who work in retail and ensuring that staff receive a fair wage for their work.
But he warned that the government needed to “carefully consider the impact of higher wages on independent businesses in the months and years ahead so that our members can continue to thrive.”
