Independent retailers bodies have warned that a National Living Wage of £11.44 will be tough for many local shops to afford, having struggled with a cost of doing business crisis for nearly two years now.
Announced today (21) by the Treasury, the new headline NLW rate will apply to everyone aged 21 and over (was previously 23 or over) and confirms that the Government will meet its target of increasing the National Living Wage to two-thirds of median earnings by 2024.
Reacting to the announcement, the Federation of Independent Retailers (the Fed) says the latest increase in the national minimum wage to £11.44 an hour will be damaging to many small stores.
The Fed’s National President Muntazir Dipoti warned that the extra cost could be the tipping point for stores that are already struggling to stay in business in the current economic climate.
He said: “As responsible employers, we want to pay our staff a fair wage for a fair day’s work. However, it should be borne in mind that many small shops are also struggling to cope with soaring costs.
“Unfortunately, there are hours in the day when some retailers do not generate an income of £11.44."
In response, the Association of Convenience Stores (ACS) has warned about the affordability of the increase and called for a pause on future increases if they’re shown to be damaging investment and employment prospects.
ACS chief executive James Lowman said, “A National Living Wage of £11.44 from April reaches the Government’s long standing target of reaching two-thirds of median earnings by 2024. This will be tough for many local shops to afford, having struggled with a cost of doing business crisis for nearly two years now, and with wage bills the biggest expense for most retailers.”
Findings from ACS’ National Living Wage Survey 2023 have revealed that retailers have already responded to recent increases in the NLW by taking lower profits (69 per cent of stores), reducing staff hours (56 per cent), reducing the amount they invest in their business (50 per cent) and automating certain processes (50 per cent).
