Costs stack up for retail

A pricey domino effect for retailers.

Faraz Iqbal (left) and Dennis Williams (right) warned of cost pressures.
Faraz Iqbal (left) and Dennis Williams (right) warned of cost pressures.

NEXT year, the minimum wage will increase across all age brackets and, while plenty of retailers would be happy to pay their staff more, it’s the economic reality is complex.
Many stores face a slew of cost pressures, including the coming rise in National Insurance contributions; an increase in corporation tax; as well as the need to prepare for Scotland’s deposit return scheme (DRS).

Chris Cobb, owner of Cults Keystore in Aberdeen, said that unfortunately, the cost of the Chancellor’s planned wage hike would likely be passed on to his customers.

“Obviously with it being such a big increase, costs are going to have to go up as well, along with our prices.

“I discussed this with our baker recently and they said the same thing, product prices are going to have to increase.

“The worst-case scenario would see us having to cut down on staff hours to afford to hire them which is something that no one wants to happen.

“With schemes such as DRS coming in as well, all of these prices are just going to add up in the end, just as things are beginning to go back to normal for businesses after Covid, this has all really caused some concern.”

Dennis Williams, of Premier Broadway Convenience Store in Oxgangs, Edinburgh, said that next year’s wage increase adds further pressure onto an industry already struggling to fill vacancies.

“It’s going to be a big burden on the sector, with increasing energy prices and national insurance already going up. It’s become a triple whammy for retailers.

“Ask any retailer, since things have opened up it’s been a challenge to get staff and the extra costs will only add to this pressure,” he said.

Across the Forth in Kirkcaldy, Faraz Iqbal of Premier Link down Local said the wage increase comes at a challenging time for Scotland’s retailers.

The festive season may be known as the ‘golden quarter’, but the looming prospect of higher energy bills is a cause for concern, according to Faraz.

“If you’re looking to renew your contract, prices for that have already gone up by 16% and are expected to rise over the next six months to a year which will also add to the overall cost for retailers,” he said.