U.K. Minimum Wage Hikes Harms Retailers

The Association of Convenience Stores said independents are hurting because of changes to the national minimum wage.

August 12, 2011

LONDON - Erratic changes to the U.K. minimum wage has harmed local retailers, according to the Association of Convenience Stores (ACS), Inspireme.co.uk reports. ACS has repeatedly reported that the frequent jumps in the national minimum wage this year have piled on additional burdens to retailers already hurting.

The national minimum wage in the United Kingdom jumped from ?3.90 for workers over the age of 21 in 1999 to ?5.93 today. In October, it will increase to ?6.08 per hour.

"Employment costs are the biggest outgoing for convenience store retailers and unpredictable minimum wage increases at a time when the other costs of running a business are skyrocketing will only lead to more staff being laid off," said James Lowman, CEO of ACS.

The ACS is currently conducting a survey of its members to see how they are dealing with these minimum wage hikes. "The most effective way of influencing the Low Pay Commission is to give them the facts about how retailers react to change in the minimum wage, and this survey is extremely important in making sure retailers get their voices heard," said Lowman.

The recession has hit Britain??s retailers especially hard, with 14.5 percent of shops vacant now. Retail employment has plummeted for the last three quarters, and the cost of this wage hike will probably contribute to many retailers hiring new workers.

However, trade unions have hailed the wage increases. "The increases in minimum wage rates show that the government understands the national minimum wage must remain an important part of working life," said Brendan Barber, general secretary for Trades Union Congress.

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