National minimum wage hikes will hit high street hard, warns the ACS

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James Lowman

A survey by the ACS found 72% of retailers are already reducing the number of paid working hours in their business

The Association of Convenience Stores has warned the government that imminent hikes in the National Minimum Wage and National Living Wage rates will put further pressure on high street businesses.

The warning comes as the government announced what it described as “the biggest cash increase ever” in the National Living Wage rate on 31 December.

It is set to rise by 51p in April to £8.72 per hour, from its current rate of £8.21.

Findings from the ACS’s National Living Wage survey suggest that retailers are already taking action to deal with the most recent increase in the National Living Wage in April 2019, with 72% of retailers reducing the number of paid working hours in their business.

A reduction in profitability has been felt by 64% of their business owners and 52% of independent retailers have had to take on more hours in the business themselves.

“Every week we hear more about the challenges facing high streets, particularly secondary centres away from major cities,” said ACS CEO James Lowman. “The fact is that rising wage costs are the biggest single factor among many issues impacting all types of retailers, and there is a tension between the desire to raise wages for the lowest paid and the need for viable shops and vibrant high streets.

“Convenience stores offer a wide and growing range of products and services, often stepping in where other businesses have closed, but these require people to deliver them – 405,000 people work in our sector. This increase in minimum wage rates – which is four times the rate of inflation – will have an impact on investment, reduce staff hours for many employees working in the sector, and force retailers to work even more hours in the business themselves to make up the shortfall.”

From April the new rates will be as follows: