Convenience retailers stand to lose £166m as a result of George Osborne’s new National Living Wage, with 80,000 jobs potentially at risk, new research has claimed.
The analysis by the Association of Convenience Stores (ACS) predicts the introduction of the new £7.20 hourly minimum wage for over-25s as of April 2016 could lead to more than 24,000 independent stores closing and 80,000 jobs being lost as a result.
The government plans to introduce an increased employment allowance to soften the impact of the New Living Wage on employers, but the ACS said this would provide comparatively “small compensation” for convenience stores.
“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,” said ACS chief executive James Lowman.
“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,” he warned.
“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.”
Lowman said the Chancellor must face up to the impact this will have on business and called for more support for retailers. The ACS has also called for the Low Pay Commission to set the National Living Wage rates through to 2020.
The new National Living Wage was announced by Osborne as part of his summer budget two weeks ago. Independent retailers have been highly critical of the budget, which also proposed reforms to Sunday Trading laws.