The potential rise in the National Living Wage (NLW) to £12.10 could be a “tipping point” for many convenience stores and wholesalers unless the UK government steps in with targeted tax relief, support and grants.
The Low Pay Commission (LPC) is on track to raise the national living wage to £12.10 an hour in April 2025, with the possibility of suggesting an even higher rate before the budget following Labour's adjustment of its mandate to secure a "genuine living wage". Young workers are likely to get an even bigger increase as ministers say that 18 to 20-year-olds should be paid the same as those older than 21.
While this has been praised as "good news" for low-wage workers, key players in the convenience channel argue it’s a shortsighted move. Asian Trader reached out to prominent retailers, associations, and wholesalers across the UK to gauge their reactions, and the concerns are palpable.
Retailer Trudy Davies
Trudy Davies, who runs Woosnam and Davies News in Powys in Wales, has always placed high value on her staff as she believes they are the ultimate face of the business. However, with the expected rise in waiting, she is now facing a dilemma.
Davies told Asian Trader, “I do think that small businesses and in particular retail stores like mine will be thinking very hard about their opening hours and/or reducing the number of staff. Reducing the number of staff would mean that the business owners themselves would be forced to work even longer hours.”
Julie Kaur, owner of Premier Jules Convenience in Telford, shares the same concern. Her husband Joey, who manages staff wages, fears they’ll have no choice but to let an employee go.
Joey told Asian Trader, “If the proposals go through, we would be forced to possibly let one member of staff go. We need to see our expenses too but we also need to make sure there are enough people on the shop floor. These days we need a couple of people more to look out for shoplifters.
Retailers Julie Kaur and Joey Duhra
“The increased wages will come out of our pockets and margins. When government high wages, it sounds like a goody-goody move, but we forget that the wages are coming out of someone’s pockets.”
Down in South London, Nisa store owner Benedict Selvaratnam (better known as Ben) anticipates a significant strain on margins at his Croydon-based Freshfields Market store, when the rise comes into effect.
Ben told Asian Trader, “The potential rise in National Living Wage is a double-edged sword for many small businesses like ours. On one hand, it’s clear that employees deserve fair wages, especially with the cost of living increasing.
"But, as a business owner, this increase puts a significant strain on already tight margins, particularly for small, independent stores that are still grappling with rising costs across the board—whether it's energy, supply chain issues, or other overheads.
Retailer Benedict Selvaratnam
“Many small retailers are operating on razor-thin profit margins, and adding to payroll expenses could force some to reduce staff hours, cut back on hiring, or even consider price increases that might turn customers away. Small stores already feel like they’re absorbing costs from every direction, and this could be the tipping point for some.”
Fed’s National President Mo Razzaq, who has more than 20 years' experience in retailing, too fears the rise will force several convenience stores and newsagents to take some tough decisions like reducing staff numbers and taking on an extra load of work.
Razzaq told Asian Trader, “It will have a big impact, and our members are very concerned. 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 the Low Pay Commission’s latest recommendation of raising the national living wage to as much as £12.10 would be a step too far for hard pressed small businesses.
Fed National President Mo Razzaq
“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 Association of Convenience Stores (ACS) echoes these concerns. The body, in a written submission to LPC, warned of “unintended consequences” that NLW rise can have, like shift towards more gig economy working, reduction in in-work progression, entrepreneurship becoming less attractive and a reduction in business investment.
ACS Communication Director Chris Noice told Asian Trader, “We have called on the commission to establish a process that balances the importance of high quality, secure employment opportunities with wage rates that promote a robust and stable job market.
"By considering the four emerging risk areas outlined above, the commission will be able to identify where rising wage are having a negative impact on the labour market and the wider economy.”
Wholesalers’ woes
Apart from convenience stores, wholesalers too are concerned and not very thrilled at the probable rise and that too, during a period of sustained economic challenge.
The Federation of Wholesale Distributors (FWD) has surveyed its members, and over half believe that wage increases should be capped at the rate of inflation. Many fear that anything beyond inflation could lead to higher consumer prices, reduced investment, or even layoffs.
FWD stated, “55 per cent of members stated that the proposed NLW increase would result in increased prices for consumers while 50 per cent members stated that the proposed NLW increase would have a negative impact on investment.”
FWD, in its submission to LPC, added that it is crucial to consider the external economic factors facing the food and drink wholesale sector when deciding the NLW rate for 2025.
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“This sector is already grappling with soaring costs, and maintaining economic stability is of paramount importance as it strives to recover from the effects of the pandemic,” stated the body.
In a survey conducted by FWD, the 2025 NLW rise emerged as a grave concern for wholesalers. As with previous increases in wage bills, they believe the primary negative impacts of the 2025 rate will be on their profits, their pay structures and differentials, and the prices they offer to customers.
While almost one third of FWD wholesale members expect to “reduce the number of staff they employ”, 28 per cent said they would very likely have to increase prices for consumers to mitigate their expenses.
Almost 27 per cent said they would likely have to reduce staff employment benefits, 22 per cent said they would likely have to reduce investment in other areas of the business (e.g. sustainable alternatives etc). 11 per cent said they were likely to have to “close their business”.
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When asked what they think the 2024 rate should be increased to, most stressed that the rate should increase by no more than the rate of inflation.
The wholesale body, in its submission to LPC, also pointed out that when the wages of employees in the lower wage bracket increase, more qualified staff also expect to see their wages rise to reflect their training. Therefore, whilst happy to pay their staff higher rates, some members are concerned about the sustainability of wage increases.
Best way forward
Retailers and wholesalers aren’t opposed to fair wages. What they’re asking for is a balanced approach—one that ensures better pay while considering the practical realities small businesses face.
Noice from ACS told Asian Trader, “The government must also consider the impact of higher rates on businesses, and the possibility of wage rises resulting in significant negative outcomes in the employment market. Convenience stores currently offer almost half a million secure local jobs that offer genuine two-sided flexibility – it is imperative that they can continue to do so in the face of cost increases.”
Independent retailers association BIRA also recognises that in present environment, “an above inflation increase in the national living wage will put more pressure on businesses, and the result may be less hours for the staff or price increases or both”.
Bira CEO Andrew Goodacre
BIRA chief Andrew Goodacre is calling on the government to “keep small business rates relief and the retail rates discount at 75 per cent”.
Goodcare told Asian Trader, “The message to the government is that if the increase is a minimum of 5.8 per cent, we do not need to add more on for the cost of living as inflation. Furthermore, retailers want to pay employees more and one way of helping them would be to increase the employer’s NI allowance to £6500.
“Finally, if wages are to rise by 6 per cent, we must keep small business rates relief and the retail rates discount at 75 per cent.”
Pointing out at the irony that many store owners are unable to pay themselves the living wage, Razzaq stated, “While we support the minimum wage in principle, it is important that we feel that there is a valuable balance to be struck between the welfare of employees and the vital sustainability of our smaller shops, so wages can be afforded and paid in the first place.”
Welsh retailer Davies feels that the government needs to be mindful that small retail stores and businesses cannot simply pay more.
She said, “The government can lessen the blow to us retailers by easing the tax system or giving grants to any businesses with less than say 10 employees. This way, the store can still have a chance to pay the wage and continue to retain all staff and their hours of working.”
Echoing Davies’ thoughts, Croydon-based retailer Ben is also calling on for “tax reliefs, reduced business rates, or some form of targeted financial support for smaller businesses”.
“The best way forward, in my opinion, is a phased approach to wage increases, along with better support structures for small businesses. The rise needs to be paired with incentives that help businesses reinvest in their growth rather than just scraping by. If the government could introduce a sliding scale of support based on the size of the business, it would give smaller enterprises a fighting chance to adjust without resorting to layoffs or price hikes.
“We understand the importance of fair wages, but there needs to be a balance. Small businesses need support to cope with these rising costs. Without this, many independents could face closure, reducing competition and leaving communities underserved,” he said.
At its core, the issue isn’t about opposing fair wages—it’s about survival. Small businesses are already stretched to their limits, and without government intervention, this wage hike could be the final nail in the coffin for many.
A Rossendale shop has had a licence bid rejected after repeatedly selling vapes to children and having illegal products on its premises.
Management at the Ibra Superstore at 34 Burnley Road, Bacup, have shown ‘no regard’ for children’s protection and safety, and have insufficient controls for licensing, Rossendale councillors have ruled.
Ibrahim Mohammad, director of the Ibra Superstore, had recently applied to Rossendale Council for a new premises licence. But the borough’s licensing sub-committee rejected his bid after a meeting which heard allegations from the police and trading standards officers.
The Burnley Road shop has been subject to various licensing changes and concerns in recent years. In the past, it was called Bacup Wines.
Ibrahim Mohammad, the applicant, attended the Rossendale licensing sub-committe meeting with his father,Amin Mohammad. Also there was PC Mick Jones, of Lancashire Constabulary, and Jason Middleton of Lancashire Trading Standards. Councillor Bob Bauld attended as an observer.
Mr Mohammad wanted a premises license for alcohol sales and opening hours from 8am to 11pm, seven days a week. He already had a personal licence. He said the Bacup shop would install a CCTV system, keep an incident log and a refusals record, check customers’ ages, display information about staff and give them regular training.
Trading standards officer Jason Middleton said Ibra Superstore Ltd was incorporated as a company in April 2023. Since then, trading standards had received 11 complaints about under-age sales and carried out visits.
Breaches included non-compliant vapes being found which broke a 2ml limit on the quantity of nicotine-containing liquid, no age checks and no information on display.
During one visit, Amin Mohammad tried to leave with a bag containing 10 illegal vapes. In test purchases by trading standards, an ‘Elf Bar’ vape was sold to a 14-year-old by Amin Mohammad and an illegal Hayati Pro Max vape to a 13-year-old by Ibrahim Mohammad. The shop claimed a phone call distracted staff during the 13-year-old’s purchase and illegal vapes came from ‘a man in car’.
Councillors heard different speakers, looked at written reports and also some video footage from the applicant. But they rejected the premises licence bid.
Giving their reasons, they stated: “There was a repeated history and pattern of behaviour regarding under-age sales of age-restricted items, such as tobacco products and vapes to children. You must not sell vapes to anyone under the age of 18. This is a criminal offence which the council takes very seriously.
“It is clear you breached the law by failing a test purchase operation in which you sold an illegal vape to an under-age child. The sub-committee feels that you have no regard to the protection and safety of children.
“The sub-committee feels that there is insufficient management control at the premises. There is no credible system to prevent under-age sales of age-restricted products and no measures in place to avoid harm to children and to prevent crime and disorder
“Therefore, given the number of incidents, the circumstances surrounding the incidents and the fact that the matter involves safeguarding issues relating to young, vulnerable minors, we consider that the seriousness of the incidents and the crimes committed against young children undermines the licensing objectives to prevent crime and disorder, and protect children from harm.”
The shop has the right of appeal to a magistrates court within 21 days of the date of the notice.
SPAR North of England retailer Dara Singh Randhawa’s family store has been awarded £100,000 of free stock after hitting all his targets since moving to the symbol.
Dara and his family, who have their SPAR store in Patrington in the East Riding of Yorkshire, joined SPAR through its association with James Hall & Co. Ltd in August 2023 having taken the decision to maximise the store’s potential.
It is a decision they have not looked back on, with sales increasing by up to 25% and margins also showing significant uplift in the last 12 months.
Key to the store’s improved performance is the complete overhaul of products available in-store, particularly the fresh food range, to better support people who live in Patrington and the surrounding area.
A new store layout and refrigeration, better Food To Go and meal deal options, a coffee machine, and a Calippo slush machine were also installed during a major refurbishment prior to launch.
Dara said: “Our move to SPAR has been excellent. We have seen fantastic sales uplift and the support from the team at James Hall & Co. Ltd has been brilliant. The £100,000 of free stock is the cherry on the cake.
“We have been very impressed with the Price Locked promotions, in particular. These give customers confidence to do bigger shops with us as they see value on our shelves and the products at the same prices for longer.
“At times over the summer when tourists and visitors to the area add trade, we have seen sales £6,000 a week higher than our average. This is against a backdrop of the popular caravan park in the village being closed almost all year.
“We are really pleased with the position we are in, and we will be looking to achieve more in 2025.”
Peter Dodding, Sales Director at James Hall & Co. Ltd and Chairman of the SPAR Northern Guild, said: “Congratulations to Dara and the Randhawa family on hitting their targets and earning £100,000 of free stock.
“We recognise switching brand is a big decision for a retailer which is why this isn’t a gimmick, and we offer this to all retailers who join the SPAR family with James Hall & Co. Ltd.
“As well as our £100,000 incentive, we also offer retailers the chance to achieve up to an additional £5,000 of free stock if they successfully refer a friend.
“These opportunities provide additional motivation to retailers alongside the comprehensive benefits that joining the SPAR brand brings with it.”
James Hall & Co. Ltd is a fifth-generation family business which serves a network of independent SPAR retailers and company-owned SPAR stores across Northern England six days a week from its base at Bowland View in Preston.
The government has on Wednesday announced its acceptance of the Low Pay Commission’s (LPC) recommendations on the rates of the National Minimum Wage (NMW), including the National Living Wage (NLW).
The rates which will apply from 1 April 2025 are as follows:
NMW Rate
Increase (£)
Percentage increase
National Living Wage (21 and over)
£12.21
£0.77
6.7
18-20 Year Old Rate
£10.00
£1.40
16.3
16-17 Year Old Rate
£7.55
£1.15
18.0
Apprentice Rate
£7.55
£1.15
18.0
Accommodation Offset
£10.66
£0.67
6.7
The recommended NLW rate is expected to equal two-thirds of median earnings and to have the highest real value in the history of the UK’s minimum wage. The increase in the 18-20 Year Old Rate narrows the gap between that and the NLW, in anticipation of the adult rate being extended to 18 year olds in future years.
“The government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that has created alongside other pressures to their cost base,” Baroness Philippa Stroud, chair of the LPC, said.
“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”
Stroud admitted that the data show some signs of employers finding it harder to adapt to minimum wage increases.
“The tightening of the labour market since the pandemic has unwound, but the overall picture is similar to 2019. The economy is expected to grow over the next year, although productivity growth remains subdued,” she noted.
Business secretary Jonathan Reynolds said:
Good work and fair wages are in the interest of British business as much as British workers. This government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth.
The recommended increase in the 16-17 Year Old Rate restores that rate to its original value relative to the adult minimum wage. In line with previous recommendations, the Apprentice Rate will remain equal to the 16-17 Year Old Rate.
SPAR UK has announced the appointment of Michael Fletcher as its new managing director.
Fletcher spent 22 years at Tesco plc, where he held numerous senior commercial roles in the UK, Ireland and Asia. He joined Co-op Retail in 2013 where he held the position of chief commercial officer before moving on to become CEO of Nisa Wholesale, a role he held until 2022.
Since leaving Nisa, Fletcher has taken on several non-executive director and board advisory roles. He is also the founder and chief executive of Sleet Brush Limited, where he focuses on designing and implementing innovative solutions to complex retail and wholesale challenges.
“Michael has outstanding credentials in commercial, retail and FMCG sectors, with experience across various trading environments,” Nick Bunker, non-executive chair, SPAR Food Distributors Ltd, said.
“His professional capabilities and high standards consistently drive excellent business performance and operational resilience. We are delighted with his appointment and look forward his lasting and positive contribution to the SPAR business.”
Fletcher added: “SPAR is a globally recognised and respected brand, and I am thrilled to join the team. I look forward to supporting the ongoing strengthening and development of the SPAR proposition in the UK.”
October saw shop prices fall marginally further into deflation for the third consecutive month with food inflation eased, particularly for meat, fish and tea along with chocolate and sweets as retailers treated customers to spooky season deals, shows industry data released today (29).
According to British Retail Consortium (BRC), shop price deflation was at 0.8 per cent in October, down from deflation of 0.6 per cent in the previous month. This is below the 3-month average rate of -0.6 per cent. Shop price annual growth was at its lowest rate since August 2021.
Food inflation slowed to 1.9 per cent in October, down from 2.3% in September. This is above the 3-month average rate of 2.1 per cent . The annual rate continues to ease in this category and inflation remained at its lowest rate since November 2021.
Fresh Food inflation decelerated in October, to 1.0 per cent , down from 1.5 per cent in September. This is below the 3-month average rate of 1.2 per cent . Inflation was its lowest since October 2021.
Ambient Food inflation decelerated to 3.1 per cent in October, down from 3.3 per cent in September. This is below the 3-month average rate of 3.3 per cent and remained at its lowest since March 2022.
Helen Dickinson OBE, Chief Executive of the BRC, said, “October saw shop prices fall marginally further into deflation for the third consecutive month. Food inflation eased, particularly for meat, fish and tea as well as chocolate and sweets as retailers treated customers to spooky season deals. In non-food, discounting meant prices fell for electricals such as mobile phones, and DIY as retailers capitalised on the recent pick-up in the housing market.
“With fashion sales finally turning a corner this Autumn, prices edged up slightly for the first time since January as retailers started to unwind the heavy discounting seen over the past year.”
“Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed Government regulation. Retail is already paying more than its fair share of taxes compared to other industries.
“The Chancellor using tomorrow’s Budget to introduce a Retail Rates Corrector, a 20 per cent downwards adjustment, to the business rates bills of all retail properties will allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said, “Inflation in the food supply chain continues to ease and this helped slow the upward pressure of shop price inflation in October, however other cost pressures remain.
“Consumers remain uncertain about when and where to spend and with Christmas promotions now kicking in, competition for discretionary spend will intensify in both food and non-food retailing.”