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ACS’s National Living Wage Survey 2023 revealed that 69% of retailers have had to lower profits as a response to rising wages 

The Association of Convenience Stores has called for a cautious approach to the setting of future National Living Wage rates after finding the detrimental impact it was having on retailers’ profits and operations.

In a submission to the Low Pay Commission, ACS has urged it to recognise the unique challenges faced by businesses, including local shops, caused by the cost of living crisis.

Following last year’s NLW increase from £9.50 per hour to £10.42, the ACS’ National Living Wage Survey 2023 revealed that retailers have had to lower profits (69% of stores), reduce staff hours (56%), lower the amount they invest in their business (50%) and automate certain processes (50%), in order to manage it.

The trade body has put forward a number of factors that would signify negative impacts on the economy and the labour market, and which could trigger the ‘emergency brake’. These include: limited in-work progression, decreased attractiveness of entrepreneurship compared to employment, and adoption of gig economy models.

“The convenience sector is a prime example of genuine two-sided flexibility in the labour market, providing local, secure and flexible jobs to hundreds of thousands of people across the UK,” said ACS CEO James Lowman.

“It is important that future wage rates are approached with caution, set independently of political targets and that decisions are made in the context of the economic climate. An ‘emergency brake’ mechanism to suspend uprating when wage rates have a detrimental effect on employment opportunities could prove crucial.”