Budget: Retailers prepare for National Living Wage rise

Independent retailers contacted by C-Store will turn to technology and reduced staff hours in response to the latest National Living Wage rise.

Chancellor Philip Hammond announced in Monday’s Budget that the National Living Wage will rise from £7.83 to £8.21 (4.9%) in April 2019.

Richard Inglis, who owns three Welcome Co-op franchises in Southampton, is investing in technology to counter rising staff costs.

“We recently introduced self-service tills in our stores to reduce staff hours. Despite the increase of pay, the decrease in hours will hopefully mean we are spending less on staff as of next year,” he said.

“With less staff on duty in store, we hope that we can be more generous with our pay rates, and just keep hold of the better employees.”

But for Vic Grewal, owner of a Budgens store in Thames Ditton, technology simply isn’t an option.

“It’ll be a real challenge for the smaller businesses, as they can’t use technology and have self-service tills, which means they will feel the full force of the wage rise,” he added.

“We may end up having to have cut backs in the amount of hours our staff work. We hire a lot of part-time, student employees however, which is one way we see as an option of getting around this issue.”

Scott Graham, owner of McLeish Inverurie, in Scotland, worried that the lack of accessibility to technology will result in further losses, but hoped recent investments may benefit his store in the long run.

“If I could find technology that would help us I would invest in it. But as things stand, self-scanners aren’t on our agenda as we simply cannot afford them, leaving me very concerned,” he said.

“I recently spent a lot of money on training our staff so simply cannot just cut staff now. We have invested around £4,000 on improving our deli, which we hope will reduce cooking times and keep down our energy bills. We believe that while it may be a big investment now, we hope the return will be worth it in the long run.”

Tony Lipscombe, owner of Premier Neyland Supermarket, in Milford Haven, Wales, said the announcement was “disastrous for the industry” and would result in reduced staff hours and more working hours for him.

“The raise in the National Living Wage is just ridiculous and will cost us retailers a lot of money. In terms of what we can do to combat it, we are simply going to have to cut staff and cut staff hours,” he said.

“Owners like me will end up working more hours in store for less money as a result, which none of us want.”