The Association of Convenience Stores (ACS) has submitted a proposal to the Low Pay Commission, urging them to consider the unique challenges faced by local businesses, such as local shops, in today’s economy. With the rising cost of living and increased operational costs, these businesses have been struggling to adapt to the recent increase in the National Living Wage (NLW).
As of April 2023, the NLW has increased by 9.7%, rising from £9.50 to £10.42 per hour, in line with the government’s target to reach two-thirds of median earnings by 2024. However, this increase has had a significant impact on retailers, forcing them to respond by taking lower profits (69% of stores), reducing staff hours (56%), reducing their investment in business (50%), and automating certain processes (50%), as revealed by the findings in ACS’ National Living Wage Survey 2023.
ACS chief executive, James Lowman, commented on the issue, stating that the convenience sector is a shining example of the genuine flexibility of the labour market, providing numerous jobs that are both local and secure. He added that it is crucial to approach future wage rates with caution, set independently of political targets, and that decisions should be made in the context of the economic climate. Implementing an “emergency brake” mechanism to suspend uprating when wage rates have a detrimental effect on employment opportunities could prove crucial, according to Lowman.
ACS has proposed several factors that would signify negative impacts on the economy and the labour market, which could trigger the “emergency brake.” These include limited in-work progression, decreased attractiveness of entrepreneurship compared to employment, and the adoption of gig economy models.
For more information on ACS’s full submission to the Low Pay Commission, visit their website.
