The Scottish Grocers Federation said the forthcoming increase in minimum wages rates would present local shops and in particular convenience stores with significant challenges going forward.
The UK government yesterday confirmed in the Autumn Statement that the National Living Wage (NLW) for people aged over 23 will increase from April 2023 to the hourly rate of £10.42, an increase of 92 pence or 9.7 per cent.
Alongside the NLW, the National Minimum Wage (NMW) rates for younger workers will also see significant increases.
“The hike to the National Living Wage from April 2023 represents almost a double-digit increase and will hit retailers hard particularly as wage costs are a large proportion of shop costs. This in turn will jeopardise profitability, employment sustainability and ultimately business survival,” Pete Cheema, SGF chief executive, said.
“This comes at a time when convenience retailing businesses are being confronted with an exceptionally challenging trading environment which is characterised by the industry being exposed to soaring energy costs, rising inflation, and rising interest rates and a cost of living crisis. On top of this the smooth flows that produce efficient and effective supply chains are broken introducing further costs and disruption. While there are no easy answers, this latest increase to the National Living Wage will potentially prove a step too far for many retailers.”
The trade body has urged the Scottish Government to look to provide additional support around business rates and associated reliefs as announced for by the chancellor for businesses in England.
“What I would say however is that the steps the chancellor announced to support businesses in England such as freezing the business rates multiplier at its current level in 2023-24 and increasing from 50 per cent to 75 per cent in April 2023 the business rates relief for eligible retail and hospitality businesses up to a maximum of £110,000 of relief per business, is move in the right direction. This will help support convenience stores and other local shops,” Cheema said.
“From our perspective, the Scottish government should look to use their forthcoming Winter Budget to provide, at the very least, similar support here in Scotland.
“I will be writing to the Scottish government on these important issues as a matter of urgency.”
