The Association of Convenience Stores (ACS) has submitted new evidence to the Low Pay Commission, detailing the thousands of jobs that will be lost in the convenience sector as a result of the introduction of the National Living Wage in 2016.
ACS has estimated that in 2016, the introduction of the living wage at £7.20 per hour for workers over 25 will cost the sector in excess of £167m.
When asked about the impact of the Living Wage, retailers said that they would take the following steps to keep their business afloat:
• 62% 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
• 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. Our latest research shows that over the last three months, optimism and investment plans have taken a significant downturn, suggesting that retailers are already beginning to prepare for the impact of the living wage.”
In its submission to the Low Pay Commission, ACS has called for the Commission to review the impact of the 2016 National Living Wage before making a recommendation on the 2017 rate.
Lowman added: “Our evidence shows that the impact of the living wage next year will be devastating, and plans to hike wages up to £9 per hour by 2020 will certainly close some stores. An escalating living wage will cost jobs and investment every single year.”