C-store owners have been placed under further pressure following the latest increase in the National Minimum Wage (NMW).
On October 1, the NMW for adults rose by 2.5% from £5.93 to £6.08 per hour. The Youth Development rate increased by 6p to £4.98 per hour while the 16-17 year-old rate rose from £3.64 to £3.68 per hour. The minimum wage for apprentices also increased from £2.50 to £2.60 per hour.
The NMW has increased every year since its introduction in 1999 and has jumped from £3.60 per hour for an adult to £6.08 per hour in 2011. The constant increases have left many retailers faced with the prospect of cutting back on staff in an effort to remain profitable.
Heather Stothard of Spar in Maltby, Rotherham, said that she’s had to take on more hours herself. “A member of staff left just before the increase and we can’t replace her,” she said. “The store is doing well but it’s being eaten up with costs like this.”
Jai Singh who runs Singh’s Premier in Sheffield said that he may have to readjust his staff schedule to cope with the additional cost.
“We haven’t had to cut hours yet but it may have to be done when the full cost of the rise becomes clear,” he said.
The Association of Convenience Stores (ACS) has been lobbying for a freeze on the NMW while the Low Pay Commission conducts research for its 2012 remit to determine the rate for next year. “It’s the biggest issue facing retailers and is having an effect on businesses growing and staff hours,” said chief executive James Lowman. “I believe that a freeze in the minimum wage is necessary to help businesses thrive.”
A recent ACS survey highlighted the barriers to growth suffered by retailers due to rising minimum wage costs. According to the survey, 80% of respondents reported cutting back on staff hours while 74% reported an impact on store expansion plans. A massive 81% believed the increases had made their business less competitive.
The commission is due to present its report to government early next year.