Independent retailers are warning of job losses and cuts to staff hours because of rising business costs triggered by the double whammy of increases to national insurance contributions (NICs) and the minimum wage.
A survey by the Federation of Independent Retailers (the Fed), which represents 9,000 independent news and convenience stores in the UK and Ireland, found that 52 per cent of respondents said they would be cutting back their workforce, while two thirds (67 per cent) are going to cut back on staff hours.
A whopping eight in ten (80 per cent) of members said they will be forced to work more hours themselves.
The survey results were released on the eve of increases of 6.7 per cent to the national minimum wage, taking it to £12.21 per hour.
From April 6, Employers' National Insurance Contributions (NIC) will increase from 13.8 per cent to 15 per cent, while the threshold - the point at which employers begin to pay NI on an individual’s salary - will be reduced from £9,100 to £5,000.
The Fed’s also found that while four in 10 (41 per cent) of respondents said they would raise prices to combat the increasing costs, 42 per cent said they could not do so. This is mainly because so many of the products that members sell are price marked.
Meanwhile, many respondents said that any plans to invest in or expand businesses had been put on the back burner.
Only 21 per cent of those surveyed said they would be investing in or refitting their businesses. Just four per cent said they had plans to introduce technology, such as self-service tills.
The Fed’s National President Mo Razzaq said he was not surprised at the survey’s findings, but they made bleak reading.
He added: “Small independent retailers are the backbone of their communities. providing employment and creating jobs.
"As responsible employers we want to ensure we are paying a fair wage to our staff. But a bigger than expected rise to the national living wage to £12.21 an hour from April 2025 is 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 of our other costs, including energy costs, are rising.
“There is no easy way for small retailers to combat these increases. As our survey shows, the only solution available to independent shop owners is to reduce staff hours and staff numbers and, somehow, take on even more hours ourselves.”
