The government’s plan to introduce a £7.20 National Living Wage in April 2016 will put tens of thousands of livelihoods at a risk in the independent retail sector, according to research from the Association of Convenience Stores.
The new ACS study showed that the total cost of a £7.20 National Living Wage would be £166m across the convenience sector, which would put more than 24,000 stores and 80,000 jobs at risk. The organisation, which represents the c-store sector, added that the increased Employment Allowance, announced alongside the National Living Wage, provided comparatively small compensation for convenience stores.
The National Living Wage, which replaces the £6.50 National Minimum Wage, will start at £7.20 and rise to £9 an hour by 2020.
ACS chief executive James Lowman said: “We have always supported a National Minimum Wage, but the move to a higher compulsory National Living Wage will have a devastating impact on our sector. Our analysis only looks at the increase to a £7.20 national living wage from 2016, and as this rises to £9 by 2020, there could be far greater effect than even these figures suggest. This analysis is backed up by evidence provided by our members, which shows that they will be closing stores and laying staff off as a result of this policy. The Chancellor must face up to the impact of the National Living Wage on businesses, and continue to let the independent Low Pay Commission set rates through to 2020. The government also needs to look at other ways of supporting retailers hit by this new burden.”
The ACS said it would be working with the Low Pay Commission and a range of government departments to make its case and press for a change in policy.