Retail group calls for minimum wage freeze

Year-on-year increases in the national minimum wage are holding back businesses in the convenience sector, according to evidence submitted by ACS (the Association of Convenience Stores) to this year’s investigation by the Low Pay Commission.  

ACS Chief Executive James Lowman said: “Unaffordable increases in the minimum wage are holding retailers back from making the investments necessary to grow their businesses.”

Mr Lowman’s comments are based on a survey of local shop owners that together operate over 600 stores and employ nearly 9,000 people. It found significant increases in the reported "burden" of the wage increase, including:

• 80% of respondents reported having to cut back on staff hours; compared to 50% is 2010
• 74% reported a negative impact on store expansion plans; compared to 54% in 2010
• 85% reported a negative impact on pay structures, compared to 53% in 2010
• 81% believe the increase has made their business less competitive, compared to 50% on 2010

Mr Lowman continued: “There is no doubt that the recent increases in the minimum wage have come at a bad time for retailers as they struggle with increasing costs and squeezes on profitability. We are urging the Low Pay Commission not to add to that burden.

“Our survey provides further evidence that when costs go up retailers’ scale back their ambitions for growing their business, fewer people get employed and less investment is possible. At a time when we need to focus on growth the best thing the Low Pay Commission can do is freeze the minimum wage until at least 2014.”

The Low Pay Commission’s call for evidence to support its report and recommendation closed recently. The LPC will hold hearings throughout October and November and will make a recommendation to ministers in the spring of 2012.