Further evidence this week that the National Living Wage is having a huge impact on the retail industry.
The latest ACS Local Shop Report indicates that employment in the convenience sector has fallen significantly in the past year, following on from another drop the previous year. With the numbers of stores fairly stable and opening hours expanding rather than contracting, the only conclusion to draw is that operators are cutting back on employee numbers, either pro-actively or through natural wastage, in the face of cost increases.
It’s a major issue for the trade, as customer service and product availability are arguably the two most important aspects of convenience trading, and both require staff numbers to execute them properly.
Even the multiples are feeling the pinch. Indeed, I believe that wage costs are a big part of the reason that the multiple grocers are now looking to be wholesale suppliers to the independent trade, as it allows them to grow sales without having to employ any more staff. So while the potential merger of independent and multiple supply chains is a big story, the National Living Wage sits above it as an even bigger challenge.