Competitive pressures keep retail pay static

are maintaining a tight rein on pay levels in a sector characterised by intense
competitive pressures and a squeeze on margins, according to a study published

by IRS Employment Review reveals that only a third of basic pay deals in the
sector have exceeded the prevailing rate of inflation, reflecting the high
level of competition and the consequent constraints on companies’ ability to

findings are based on 50 pay reviews, with effective dates between 1 September
2002 and 30 April 2003, covering 475,518 workers, or approximately 17 per cent
of the total retail workforce.

findings include: 

Basic pay settlements in retail fell behind those for the whole economy in the
eight months to 30 April 2003.

Of the 40 settlements where a basic increase was awarded, the midpoint in the
range (the median) was pitched at 2.5 per cent

Basic increases were awarded to 95 per cent of all employees surveyed.

Less than half of basic deals, in a matched sample, were higher than the
previous year.

The median standard working week was 39 hours (ranging from 35.5 hours to 40

Pay and Benefits Bulletin editor David Carr said: “Retailers continue to be
cautious about the prospects for the sector and the uncertain outlook for
consumer spending may apply further downwards pressure on employers’ ability to
award pay rises in the coming pay round.

certainty is the forthcoming rise in the national minimum wage (NMW) from
October 2003.  The adult rate will rise
from £4.20 to £4.50 per hour – a 7.1 per cent increase. With a high
concentration of lower paid workers, the NMW has had a clear impact on pay
bills in the retail sector and the British Retail Consortium remains concerned
at the impact on retailers, especially their ability to maintain employment
levels,” he added.

By Ben Willmott

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