The Association of Convenience Stores (ACS) has given oral evidence to the Low Pay Commission, highlighting four key indicators that show National Living Wage increases should be slowed or stopped.
The trade association has urged the Low Pay Commission to give equal consideration to both the needs of employees seeking job security and wage rates that support a stable job market when monitoring the impact of National Living Wage increases.
In a written submission to the Low Pay Commission earlier this year, ACS outlined the different ways that retailers are responding to recent increases in minimum wage rates. These include:
- 53% of retailers are reducing the amount they invest in their business
- 53% of retailers have been forced to increase their prices in store
- 47% have reduced the number of staff hours in the business
- 47% of retailers have had to take lower profits and/or absorbed the costs of wage increases
The rate of the National Living Wage has increased from £8.91 per hour in 2021/22 to £11.44 per hour in 2024/25, an increase of over 28% in the last three years which has brought the National Living Wage rate up to the previous Government’s target of two-thirds of median earnings.
However, a collaboration between the Scottish Grocers’ Federation and University of Stirling in April revealed that the True Cost of Employment for retail is as much as £15.39 per hour – a jump of £1.39 on the previous year and the highest increase for at least the past eight years.
The 2024 Labour manifesto pledged to remove the age bands for the National Living Wage so that they apply for anyone over the age of 18, and to change the remit of the independent Low Pay Commission so that for the first time it accounts for the cost of living.
ACS chief executive James Lowman said: “The Low Pay Commission are faced with a tough decision on how to set future wage rates, needing to balance the needs of employers and employees, and the overall economy. We have identified four key indicators that the National Living Wage is starting to have unintended consequences and that increases should be slowed or stopped: a shift towards more gig economy working, a reduction in in-work progression, entrepreneurship becoming less attractive, and a reduction in business investment. These considerations need to be upmost in the Commission’s thinking.”
By considering the four emerging risk areas outlined above (shift to gig economy; reduction in in-work progression; declining attractiveness of entrepreneurship; reduction in business investment), the Commission will be able to identify where rising wages are having a negative impact on the labour market and the wider economy.
The convenience sector is one of the UK’s biggest employers, providing local, flexible and secure jobs to over 437,000 people. Figures from ACS’ 2024 Colleague Survey show that 98% of colleagues working in the convenience sector are on permanent contracts and as a result, 83% of colleagues feel secure in their current role. The majority of colleagues are also drawn from the local community with 47% walking to work with an average commute time of just 13 minutes per day.
