The British Retail Consortium (BRC) has called for a fundamental review of the National Minimum Wage (NMW) after claiming that last year’s rise cost retailers £1bn, and this October’s increase will add a further £1bn.
Since 1999, minimum wage increases have averaged 6.7%, higher than inflation and average earnings, and 25% of retailers surveyed by the BRC said they are likely to cut staffing costs.
In a letter to Paul Myners, the new chairman of the Low Pay Commission (LPC), the BRC’s director-general Kevin Hawkins said 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.
“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,” he said.
“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.”
