Scottish retailers left out of pocket on cost hikes
A RISE in National Insurance payments and wage hikes stand to leave Scottish c-store owners massively out of pocket, says the Scottish Grocers’ Federation (SGF).
According to the SGF, convenience staff members across Scotland make up over 55,000 jobs in Scotland, with many of this number falling within the scope of the increase to the national living wage rise.
Couple this with a third of this number already working between 17 and 30 hours every week, with many on or near the current national living wage (NLW), thousands more additional employees will require employer NI contributions, where they didn’t before.
Further to this, the planned rise of the NLW to £12.21 per hour from next April could cost around £2,400 to employ a full-time member of staff to retailers’ businesses.
Per staff member, the SGF has said that for an employee working on a 40-hour week on the current NLW costs store owners £1,601.60. Once the increase has been factored in, this rises to £1,797.16. Adding on to this, the further increase to National Insurance contributions would see this increase by a further £615, sitting at a total of £2,412.16.
With this in mind, the SGF has called for Government support for the retail sector in the upcoming Scottish Budget, which is set to be announced on Wednesday 4 December.
Luke McGarty, head of policy and public affairs, said: “Together with a plethora of new regulation directed at small local businesses, higher employment costs could now result in the Scottish sector paying tens of millions in additional outgoings.
“There is no doubt that local stores employing local staff will have to think twice before taking on anyone new or increasing staff hours. In some cases, it could be the final straw pushing retailers to reduce staff or even close the doors for good.
“Most local retailers simply won’t be able to absorb the extra cost and will either have to pass them on to customers, or reduce annual pay rises for hard working and long serving staff.
“We welcome the recognition of the additional support through the uplift in Employment Allowance, but for many that will only mitigate the damage.
“Small businesses and local shops are the lifeblood of the UK and Scottish economies, providing a critical economic multiplier to boost local growth. Now is not the time to be penalising them for creating much needed local jobs.”
