Minimum wage increase costs retailers

On the day official figures show unemployment up again, retailers are calling for a fundamental reassessment of the National Minimum Wage (NMW). They say the next inflation-busting increase will add over £1 billion to retailers' wage bills, threatening retail jobs.

Preliminary findings from the British Retail Consortium's (BRC) annual NMW survey of retailers, to be published in full this autumn, show last year's rise cost retailers £1 billion and this October's increase will add a further £1 billion. Since 1999 minimum wage increases have averaged 6.7 per cent,

"It's no surprise that a quarter of retailers say they are likely to cut staffing costs, which may include some jobs" BRC Director General Kevin Hawkins dramatically higher than inflation and average earnings. Twenty five per cent of retailers surveyed now say they are likely to cut staffing costs.

In a letter to Paul Myners, the new Chair of the Low Pay Commission (LPC), the BRC's Director-General Kevin Hawkins says the term "review" in the Commission's new terms of reference gives them the freedom to carry out a wide-ranging evaluation of the long-term goals of the NMW and they should do just that.

BRC Director General Kevin Hawkins said: "Our new figures show last year's minimum wage rise cost retailers a billion pounds and this October's increase will need another billion pounds. "That kind of money can't be found year after year without detriment to business. "With other costs, including energy prices, rent, rates and service charges now also shooting up, it's no surprise that a quarter of retailers say they are likely to cut staffing costs, which may include some jobs.

"Retailers are seriously concerned that the forthcoming review will simply continue the status quo and lead to further increases in real terms. We are urging the LPC to go back to basics and define what the ultimate goal for the minimum wage is."