Independent retailers have lashed out at the national minimum wage in a survey carried out for The Grocer Top 50 report, which will be published in February.
A whopping 69% said rising costs - and in particular the succession of above inflation increases in the wage - was the single biggest issue that faced the sector.
Their main concern was the knock-on effect of the wage further up the pay chain. Alan Gillespie, managing director of AJ Gillespie, said: “One problem is that the staff who are above the minimum wage think they should continue to be above it. Another problem is maintaining differentials of pay between shop assistants and the first layer of management staff.”
He said the chain had to raise prices to cover the cost.
Ron Whitten, financial director of Andrew Millar & Co, added that further increases could force it to lay off staff. “Our highest priority is staff retention. We want to maintain the differentials, but it is certainly causing problems in maintaining profitability,” he said.
“So far we’ve absorbed the cost by making the business efficient, but there comes a point when you’ve maximised what you can do. There is no more room to pass this on to the consumer - so we have to look at the workforce.”
The findings come as the Low Pay Commission prepares to increase the minimum wage from £4.50 to £4.85 this October and they tally with those of a survey carried out last October by the Association of Convenience Stores.
Of the 1,406 independent retailers who took part in that survey, 44% said they were less likely to replace staff that left employment as a direct result of the national minimum wage; 12% said they would be forced to make redundancies and 36% said they would have to cut back on staff benefits. A further 12% said the rise would lead to store closures. The survey also showed that 22% of employees were on the minimum wage.
A whopping 69% said rising costs - and in particular the succession of above inflation increases in the wage - was the single biggest issue that faced the sector.
Their main concern was the knock-on effect of the wage further up the pay chain. Alan Gillespie, managing director of AJ Gillespie, said: “One problem is that the staff who are above the minimum wage think they should continue to be above it. Another problem is maintaining differentials of pay between shop assistants and the first layer of management staff.”
He said the chain had to raise prices to cover the cost.
Ron Whitten, financial director of Andrew Millar & Co, added that further increases could force it to lay off staff. “Our highest priority is staff retention. We want to maintain the differentials, but it is certainly causing problems in maintaining profitability,” he said.
“So far we’ve absorbed the cost by making the business efficient, but there comes a point when you’ve maximised what you can do. There is no more room to pass this on to the consumer - so we have to look at the workforce.”
The findings come as the Low Pay Commission prepares to increase the minimum wage from £4.50 to £4.85 this October and they tally with those of a survey carried out last October by the Association of Convenience Stores.
Of the 1,406 independent retailers who took part in that survey, 44% said they were less likely to replace staff that left employment as a direct result of the national minimum wage; 12% said they would be forced to make redundancies and 36% said they would have to cut back on staff benefits. A further 12% said the rise would lead to store closures. The survey also showed that 22% of employees were on the minimum wage.
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