Rising costs ‘could put stores at risk’
THE Scottish Grocers’ Federation (SGF) has voiced fears that soaring wage costs could hamper employment and put some small businesses at risk.
The SGF raised its concerns with the Low Pay Commission (LPC) in a meeting held jointly with the Association of Convenience Stores in London last month.
Information gathered by the LPC will help determine recommendations to the UK Government for the 2024/25 National Minimum Wage (NMW) and National Living Wage (NLW).
On 1 April, the NLW increased to £10.42, a 9.68% increase on 2022/23. But research by the SGF and Stirling university has revealed that the true cost of employment for retail is closer to £14 per hour. That’s a jump of £1.25, or 9.8%, on the previous year and the highest increase of at least the past eight years.
The LPC currently estimates that the NLW rate required to meet its 2024 target will be in the range £10.90 to £11.43, with a central estimate of £11.16.
But the SGF argues the extremely challenging trading environment caused by the cost-of-living crisis will mean additional staff costs will inevitably be passed on to customers, many of whom are also struggling financially.
Meanwhile, a recent survey of SGF members shows 79% of respondents were less likely to hire more staff, due to the wage increases, with many working over 65 hours per week, just to keep costs down.
SGF chief exec Pete Cheema said: “Many convenience stores provide lifeline services and essential local employment for their communities. The never-ending pressure of absorbing more and more added costs, however, has put some businesses at risk.
“Many retail employees value the benefits of being able to work locally, and the ability to work flexible hours, but every significant wage increase leads to more staff hours being cut, which has a damaging impact on local jobs and employment.
“The commissioners and ministers, in both Westminster and Edinburgh, must recognise that local convenience stores are vital economic drivers that provide many benefits for their communities.
“On top of rising energy prices, business rates and regulatory pressures, our governments can and must do more to alleviate the growing pressure on our sector.”
