Independent retailers to cut staff amid wage increase

Retailers are feeling the economic pinch following the introduction of a national living wage that was implemented last month.

Wholesaler Palmer and Harvey (P&H) conducted research via a survey of 1000 retailers, which found one in three independents planning to reduce staff hours or increase prices, while one in four say they will cut staff numbers.

Chris Etherington, chairman and chief executive at P&H, said: “Our research confirms independent retailers see the living wage as the greatest challenge facing them.”

Last year it was revealed the company behind the retail clothing brands Monsoon and Accessorize has topped the list of firms that fail to pay staff at least the national minimum wage. Monsoon at the time responded the breach as "unintentional" and says it has been "working with HMRC in a wide-ranging review of its payroll practices in relation to the national minimum wage".

In the next five years the minimum pay rate for over-25s will rise more quickly than it has in the past 16. It will also cost jobs, as firms cut existing staff and scale back new hires. But companies will also attempt to achieve greater efficiency, tackling a "productivity crisis" in the UK that has only recently begun to improve.

The economic consequences are fiercely contested, however most are in agreement on the underlying principles. The latest confirmation came from a Recruitment and Employment Confederation survey, which found that the number of people hired via placement companies in September grew at the slowest pace since early 2013, Reuters reports.