Key Summary
Convenience retailers are urging Low Pay Commission to take measured approach to future headline rate recommendations and take into account the impact of rising employment costs on small businesses.
The Commission’s consultation follows changes in the National Living Wage in 2025 which brought the headline rate up to £12.21 per hour in April and increased the eligibility for the headline rate so that anyone aged 21 or over could receive it.
The headline rate of the National Living Wage has now increased by over 40 per cent since April 2019, and has met Government targets of first 60 per cent and then two thirds of median earnings.
In its submission, Association of Convenience Stores (ACS) has outlined the measures that retailers have to take when faced with significant increases in their wage bills.
This year’s increase has been particularly challenging for many, as the National Living Wage increases were coupled with increases in Employer National Insurance Contributions (NICs) and a reduction in the threshold at which they start paying NICs.
The most common responses to increases in employment costs this year by retailers have been taking lower profits, increasing prices, and reducing the number of staff hours in the business.
The submission calls on the Commission to take a measured approach to future headline rate recommendations that doesn’t exceed the current two-thirds of median earnings target and explicitly takes into account the impact of rising employment costs on businesses.
ACS has also recommended a phased approach to NLW eligibility, so that one age group at a time is brought into being eligible for the headline NLW rate instead of a direct jump from 21 down to 18.
The submission also comes as the Government considers the Employment Rights Bill, which aims to address one-sided flexibility in the workplace. ACS supports the intention of the Bill and has called on the Government to ensure that the measures are not just pro-worker, but also pro-business and pro-investment.
ACS chief executive James Lowman said, “This year has been extremely challenging for retailers, with many facing increases in their employment costs that have resulted in fundamental changes to the way that they run their businesses.
"We have urged the Low Pay Commission to take this impact into account when making future recommendations, and to go no further than the existing two-thirds of median earnings target.
"Convenience stores are engines of local growth that want to be able to invest in their products, processes and people but this can only be achieved if there is stability in the costs that they’re facing.”
The convenience sector employs over 445,000 people in local, secure and flexible jobs. 96 per cent of colleagues are on a permanent contract, and 81 per cent of colleagues feel secure in their current role, states ACS.