The Scottish Grocers’ Federation (SGF) has published the results of a study compiled in partnership with the University of Stirling, which shows the true cost of employment for the country’s retailers.
While the UK National Living Wage will rise to £10.42, a 9.7% increase on 2022/23, on 1 April; the SGF study claims that the true cost for retail employers in Scotland will be as much as £14 per hour. This is an increase of £1.25 on the previous year and the highest increase of at least the past eight years.
The study takes into account statutory costs, such as National Insurance and Holiday Pay, as well as additional expenses such as uniforms and administration costs.
Meanwhile, a recent survey of SGF members shows that more than 70% of respondents were less likely to hire more staff, due to the wage increases, with many working over 65 hours per week, just keep costs down.
Professor Leigh Sparks, University of Stirling, said: “The increase in the headline figure for the National Living Wage brings welcome relief to many workers struggling with the cost-of-living crisis, but the true cost to retailers is much higher and comes on top of other pressures on the cost of doing business.
“Convenience and smaller retailers need to have all these costs considered in the round and see a recognition and amelioration if they are to continue to provide their vital local services for communities.”
SGF chief executive, Dr Pete Cheema OBE, added: “Convenience stores provide a vital local service for their communities, but the pressure of absorbing all the additional costs is putting businesses at risk. Many simply can’t cope.
“Our members tell us that their staff value the benefits of being able to work locally, with flexible hours, but the significant increase to wages means that some stores will need to cut staff hours, impacting local jobs and employment.
“Both the UK Government and the Scottish Government need to recognise that local stores are economic drivers and provide many benefits for their communities. On top of rising energy prices, business rates and regulatory pressures, ministers can and must do more to alleviate the growing pressure on our sector.”
The True Cost of Employment 2023 paper will form part of SGF’s annual submission to the Low Pay Commission, for inclusion in its report and recommendations to the Prime Minister later this year.
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