Convenience store owners are firing staff and reducing working hours due to increases in the minimum wage, a new study reveals.
A new report from the Association of Convenience Stores (ACS) has called for a freeze in the National Minimum Wage (NMW) to prevent further pressure being put on local shops.
Over the last year, 42 per cent of convenience store owners had to make staff redundancies as a consequence of wage increases and half of those surveyed had to reduce staff hours.
James Lowman, ACS CEO, said: ‘It has been a testing 12 months for local shops as they face pressure to bear down on costs, this has led to many having to reduce their staffing bill.
“For some this has meant letting people go, and others reducing staff hours. Now is not the time to put jobs at risk through an unaffordable minimum wage rise.”
Each year the Low Pay Commission is tasked with reviewing the NMW and recommending the level it should be set at.
In October the NMW will rise from £5.80 to £5.93 and ACS will be arguing during this years review that it should not rise any higher.
Lowman commented: ““We welcome that this year the Commission has been asked to focus in particular on the competitiveness of small firms.
“Our survey shows that there is no doubt that small firms have the toughest challenge of all in finding ways to take costs out of the business. Employment costs are the largest outgoing for retailers, representing an average 12 per cent of their turnover.
“Another increase in National Minimum Wage would not be conducive to supporting employment within our sector or nationally.”
Half of the respondents in the ACS survey said that they believe their business has become less competitive due to the recent increases and 56 per cent said NWM increases had impacted on their business plans.
With Morrisons confirming yesterday its roll out of convenience type stores next year, independent retailers are going to be finding it even harder to compete in an already crowded market.
Lowman added: “ACS is well established as an important voice in the Low pay Commission’s process, we look forward to giving evidence before the Commission and will make our case clearly for restraint in this difficult economic period.”
The ACS surveyed 500 convenience stores for their survey, representing over 10,000 employees in the UK.