The Association of Convenience Stores (ACS) has urged a balanced process that takes into account businesses as well as employees when setting out the new minimum wage.
In oral evidence provided to the Low Pay Commission (LPC), the ACS warned that retailers are reducing investment and increasing prices in order to alleviate the pressure of rising costs such as minimum wage.
Its research found that 53% of retailers are reducing the amount they invest in their business; 53% of retailers have been forced to increase their prices in store while 47% have reduced the number of staff hours in the business with the same amount having to take lower profits and/or absorbed the costs of wage increases.
The rate of the National Living Wage has increased from £8.91 per hour in 2021/22 to £11.44 per hour in 2024/25, an increase of over 28% in the last three years which has brought the National Living Wage rate up to the previous Government’s target of two-thirds of median earnings.
Measures pledged in the Labour manifesto ahead of the 2024 General Election include a removal of the age bands for the National Living Wage so that they apply for anyone over the age of 18 (NLW currently applies to anyone aged 21 or over), and a consideration of the cost of living within the remit of the Low Pay Commission as part of their annual process for future rise recommendation.
Retailers recently expressed concern about the removal of the age bands plans.
The trade body called for a process that balances the importance of high quality, secure employment opportunities with wage rates that promote a robust and stable job market.
ACS chief executive James Lowman said: “The Low Pay Commission are faced with a tough decision on how to set future wage rates, needing to balance the needs of employers and employees, and the overall economy. We have identified four key indicators that the National Living Wage is starting to have unintended consequences and that increases should be slowed or stopped: a shift towards more gig economy working, a reduction in in-work progression, entrepreneurship becoming less attractive, and a reduction in business investment. These considerations need to be upmost in the Commission’s thinking.
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