National Living Wage the key concern for retailers

Garden centre consultant Neville Stein has said the "biggest thing bothering people in retail is the National Living Wage (NLW)" - but by increasing sales productivity, wage hikes can be offset.

Wyevale Garden Centres: chain looking to refurbish more sites and has almost 500 concessions across its 151 stores
Wyevale Garden Centres: chain looking to refurbish more sites and has almost 500 concessions across its 151 stores

The NLW is set to be introduced in April 2016 and could be around £9 per hour by 2020 for over-25s. Stein said: "Retailers are concerned - there's no surprise there. They are worried about NLW and I've been discussing it with my clients.

"My concern is people will cut staff numbers as staffing is the second largest expense but my worry is that it will have an impact on sales because of fewer people to serve the customer. I'm advising to get existing staff to sell more product through better sales techniques - there's so much opportunity. I walk through garden centres and sometimes no one even smiles at me. Sometimes NLW is a distraction from the real argument, which is what is the going rate in your local region."

He suggested that in the South East retailers might already be paying higher than minimum wage to get good staff, but in areas where there are fewer jobs the NLW will be more of an issue.

The HTA has suggested NLW hikes can be offset if extended Sunday trading comes in. Garden centre wages have failed to keep pace with sales increases over the past year, falling about 0.5 per cent to around 26 per cent.

Meanwhile, discount supermarket Aldi has gazumped rival Lidl's new pay rates by pledging to award its store staff at least £8.40 per hour from early next year. Sainsbury's said it pays £7.36 per hour, Tesco £7.39 and Waitrose £7.45. Morrisons plans to raise wages to £8.20.

Sittingbourne and Sheppey MP Gordon Henderson has suggested exempting seasonal workers from the new wage, which Defra minister George Eustice said would be taken into consideration.

Living wage - Consultant sets out potential choices for retailers

Stein said there are four options for retailers:
• Increase prices.
• Employ under-25s.
• Get more out of existing staff.
• Take a hit on profits.

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