ACS calls for ‘cautious approach’ to future wage rates

A shopkeeper wears a protective mask while working at a convenience store in Stoke Newington on April 14, 2020 in London, United Kingdom. (Photo by Hollie Adams/Getty Images)

A cautious approach to increasing the statutory minimum wage rates is needed to allow the labour market and economy to recover from the Covid-19 pandemic impact, the Association of Convenience Stores (ACS) has said.

Responding to a consultation by the Low Pay Commission on the 2022 rates, the ACS suggested extending the timetable for National Living Wage (NLW) and reaching two-thirds of median earnings by 2024, which is currently projected to be £10.33.

Citing its National Living Wage Survey 2021, ACS noted that convenience retailers have primarily responded to this year’s £8.91 NLW rate by taking lower profits (68%), increasing prices (48%) and automating certain processes (44%).

The survey has also found that almost two thirds of convenience retailers (58%) believe that the planned increase to the NLW to £10.33 in 2024 would impact their business investment plans and could have a negative impact on the number of employees in their business (63%)

“The UK labour market is still feeling the impact of pandemic, with the phasing out of the furlough scheme and shortages or workers in some sectors. It is right that the Low Pay Commission take a cautious approach when setting wage rates for next year and review the timetable for the National Living Wage rate reaching two-thirds of median earnings in 2024,” James Lowman, ACS chief executive, commented.

“Convenience stores provide local, secure and flexible employment to hundreds of thousands of people across the UK and throughout the pandemic we have seen how our colleagues have continued to work on the frontline to serve their communities. Many retailers have taken steps to reward staff for their exceptional work with bonuses and enhanced benefits.”

In its submission earlier this week, the Federation of Independent retailers (NFRN) has also warned that an increase in the wage rates will seriously harm smaller businesses looking to recover from financial difficulties caused by the pandemic.

The Low Pay Commission, the independent body which advises the government on the levels of the NLW and National Minimum Wage, will make the recommendations this autumn on the 2022 minimum wage rates.

The commission’s current projection for next April’s NLW rate is £9.42, with a likely range of 7 pence above or below this figure. This year, the rate increased to £8.91 and the age threshold for the rate reduced from 25 to 23.