C-store retailers who pay the National Minimum Wage (NMW) fear the latest 3% rise will jeopardise the economic recovery and force them to cut staff hours.
The government’s decision to raise the minimum wage to £6.50 has exasperated some retailers, who have criticised the timing of the move and labelled it a “false economy”.
Sanjeev Vadhera, director of North East Convenience Stores, which employs some 300 people across its 22 stores, said he would potentially have to cut hours and reduce investment.
“Something will have to give. It’s the first time the rise will affect us to such an extent. Previously, minimum wage rises would affect only the shop assistants, but now we’ll have to raise the earnings of assistant managers and even managers to differentiate their positions,” he added.
“It’s really bad timing, especially as the economy has just started to improve. Real wages will go up, but employment will go down. I don’t think the government thought of this.”
Barrie Seymour, of Londis Littletown, West Yorkshire, said “I don’t get why the government does it. It’s a false economy as it’ll just push prices up. We’re going to have to find an extra £300 a month to pay our 13 employees. Last time it went up we had to cut some people’s hours.
“The small independents will suffer the most from this decision and get rid of staff.”
Rishi Madhani, who owns a Today’s store Stokenchurch, Buckinghamshire, called for compensation for small businesses. “There should be some leeway for small businesses so they pay less National Insurance contributions for their employees otherwise they’ll be forced into the position of having to let staff go or cut hours to keep the wage bill down,” he said.
“We’ve got quite a few members of staff so this increase will really affect us. Turnover isn’t increasing much year on year, but overheads like minimum wage are constantly on the rise.”
” The rise in the National Minimum Wage will affect us, but it’s no bad thing. I expect a lot out of my staff. They all have departmental ownership, which eases my workload, so I think they earn it. Good staff deserve a good rate of pay. “
Dan Cock, Whitstone Stores, Holsworthy, Devon
” We pay above the minimum so it won’t affect us. It’ll put general pressure on the market, but it wasn’t an unexpected move. “
Clive Sheppard, director at the Chartman Group, a South West Spar retailer
Moving in one direction
Once the Low Pay Commission had recommended a 3% rise in the adult rate last month, it was clear that the government would accept its advice.
Ministers had lined up to offer their backing for a rise against a backdrop of minimal opposition.
The £6.50 rate will come into effect in October. The rate for 18- to 20-year-olds will rise by 2% to £5.13 an hour, while the rate for those aged 16 and 17 will rise by 2% to £3.79.
“Low-paid workers will enjoy the biggest cash increase in their take-home pay since 2008,” said business secretary Vince Cable.