Retail associations have submitted evidence to the Low Pay Commission detailing how the introduction of the National Living Wage (NLW) in 2016 will have a “devastating impact” on the convenience sector.
The Association of Convenience Stores said the £7.20 per hour NLW for workers over 25 would cost the sector in excess of £167m.
An ACS poll on the impact of the Living Wage found that 62% of retailers said they would delay investment or expansion plans; 61% said they would reduce staff hours in their business; 58% said they would reduce the number of staff in their business; and 40% said they would have to increase the number of hours that they work in the business themselves.
ACS chief executive James Lowman said: “The introduction of the national living wage will have a devastating impact on many of the 51,000 convenience stores in our sector.
“Over 60% of stores in the sector will look to reduce the number of staff hours in their business and delay investment plans, while for some already operating on the edge of profitability it will mean that they will have to either stop employing staff or close their business altogether.
“We are extremely concerned about wage rates being set for political reasons instead of being properly assessed by the independent Low Pay Commission.”
In the National Federation of Retail Newsagents (NFRN) submission, the group revealed findings of its own members’ survey showing that 12% of respondents said the NLW would result in them closing their business down.
NFRN national president Ralph Patel said: “Normally our members are optimistic despite the ever increasing burdens placed on their overheads, but our findings show they are clearly under extreme pressure and the announcement of the living wage for staff over 25 years old is the final straw for many.”