In evidence to the Low Pay Commission, the ACS said that the living wage, due to be introduced in April next year, will cost £167 million in 2016 alone.
A recent survey of ACS members revealed that 61% of retailers would reduce the number of staff hours in their business, and 62% would delay investment plans. In addition. 58% said they would cut the number of staff they employed.
The ACS Investment Tracker for June to August 2015 shows investment already down by 40% in the sector following the Chancellor, George Osborne’s announcement of the living wage in his post-election statement.
All staff over the age of 25 will be eligible for the living wage of £7.20 an hour when it is introduced. Some 78% of staff in the sector are over 25.
Edward Woodall, head of policy and public affairs at the ACS, told the Low Pay Commission: “Unpredictable increases in wage rates have a significant, damaging impact on the convenience sector. Evidence from our members show that significant jumps in wage rates will damage investment, reduce staff hours and squeeze pay structures.
“ACS supports the system for setting the National Minimum Wage, but is deeply concerned about the living wage being used as a political bargaining tool. We believe that the Low Pay Commission should have wider powers to recommend and review all National Minimum Wage and Living Wage rates, free of interference from Government.”
The Low Pay Commission has been asked by the government to consult with trade and industry about the Living Wage. Its first report is due in February 2016.
The convenience sector employs 407,000 people across 51,000 stores in the UK. Some 75% of businesses are independent.
The sector contributes £37.7 billion to the UK.