Talking Retail Grocery and product news for independent retailers
Jeremy Hunt confirmed yesterday that the national living wage for people aged over 23 will increase from April 2023 to the hourly rate of £10.42 – an increase of 9.7%.
“This will present local shops and in particular convenience stores with significant challenges going forward,” said Pete Cheema, chief executive at the Scottish Grocers’ Federation (SGF).
He added: “The hike to the national living wage from April 2023 represents almost a double-digit increase and will hit retailers hard, particularly as wage costs are a large proportion of shop costs.
“This in turn will jeopardise profitability, employment sustainability and ultimately business survival.
“This comes at a time when convenience retailing businesses are being confronted with an exceptionally challenging trading environment characterised by the industry being exposed to soaring energy costs, rising inflation, and rising interest rates and a cost-of-living crisis.
“On top of this, the smooth flows that produce efficient and effective supply chains are broken, introducing further costs and disruption.
“While there are no easy answers, this latest increase to the national living wage will potentially prove a step too far for many retailers.”
But he backed the chancellor’s move to bring in more business rate support.
These include freezing the business rates multiplier at its current level in 2023 to 2024 and increasing from 50% to 75% in April 2023 the business rates relief for eligible retail and hospitality businesses, up to a maximum of £110,000 per business
Cheema said: “The steps the chancellor announced to support businesses in England are move in the right direction. This will help support convenience stores and other local shops.”
He added: “The Scottish government should look to use their forthcoming winter budget to provide, at the very least, similar support here in Scotland.
“I will be writing to the Scottish government on these important issues as a matter of urgency.”
