The meeting, held jointly with the Association of Convenience Stores (ACS), is part of the LPC’s annual oral-evidence session. The testimonies collected by the LPC, along with responses to the yearly consultation exercise, will shape the commissioners’ recommendations to the government for the 2024/25 National Minimum Wage (NMW) and National Living Wage (NLW).
On 1 April this year, the UK NLW rose to £10.42, representing a 9.68% increase from 2022/23. However, a collaboration between SGF and the University of Stirling has revealed that the True Cost of Employment for retail is £14 per hour, a significant jump of £1.25 or 9.8% from the previous year and the largest increase seen in the past eight years.
The LPC currently estimates that the NLW rate needed to achieve its 2024 target will be in the range of £10.90 to £11.43, with a central estimate of £11.16. This projection suggests a potential rise of up to £1.01 on this year’s NLW.
These developments come at a time when the convenience sector faces a highly demanding trading environment, characterized by persistently high energy bills, inflation, interest rates, and a cost-of-living crisis.
Consequently, the additional staff costs will inevitably be passed on to customers, many of whom are already struggling to manage their household budgets. In a recent survey of SGF members, over 70% of respondents expressed reluctance in hiring more staff due to wage increases, with many working over 65 hours per week to keep costs down.
Dr Pete Cheema OBE, the chief executive of SGF, highlights that many convenience stores play a vital role in providing essential services and employment opportunities for local communities. However, the ongoing pressure of absorbing increasing costs puts these businesses at risk.
He emphasizes that with every significant wage increase, more staff hours are cut, significantly impacting local jobs and employment. Hence, it is crucial for both the commissioner and ministers in Westminster and Edinburgh to recognize the significance of local convenience stores as vital economic drivers that offer numerous benefits to their communities.
Naturally, rising energy prices, business rates, and regulatory pressures exacerbate the pressures faced by the sector. Driven by these challenges, both the UK chancellor Jeremy Hunt and Bank of England governor Andrew Bailey stated at the annual Mansion House dinner that wage restraint is necessary to tackle high inflation. They stressed that responsible decisions on public finances, including public sector pay, are imperative as further borrowing would contribute to inflationary pressures.
The ACS urges the Low Pay Commission to establish an emergency brake mechanism to address these concerns and alleviate the mounting pressure on the sector.
Reference:
[ACS urges Low Pay Commission to establish an emergency brake mechanism](https://www.talkingretail.com/news/industry-news/acs-urges-low-pay-commission-to-establish-an-emergency-brake-mechanism-13-07-2023/)
