Wage change to spark price rise

Higher National Minimum Wage 'ultimately should mean prices rise - no beating about the bush'.

Jarman: forecasting price rises
Jarman: forecasting price rises

Horticultural employers say National Minimum Wage (NMW) rises announced in the summer Budget need to be passed on to end users.

NMW will start at £7.20 per hour, up from the current £6.50, and will be compulsory for over-25-year-olds, before rising to £9 by 2020.

Hayloft Plants' Derek Jarman said the increases "ultimately should mean prices rise - no beating about the bush". He added that with fuel and other costs continuing to rise, and "flower show and multichannel prices higher than retail plant prices, garden centre buyers might have to pay more".

Former Garden Centre Association chairman Peter Burks said the effect of NMW going up more than 10 per cent means lower earners will overtake those paid slightly more for taking on more responsibilities. "They will no longer have the financial benefit for their responsibilities so their wages will have to go up too and there will be a knock-on effect."

Around two-thirds of people on NMW work in the retail and hospitality industries and an estimated 50 per cent of garden staff are on NMW, particularly weekend, catering and till staff, while unskilled nursery staff are also often paid NMW.

BALI chief executive officer Wayne Grills said: "The living wage for employees over 25 to a target £9 per hour by 2020 will affect our members. The landscape industry is dogged by client perception, which is also fact, that pay in this sector is low.

"We continue to fight for recognition by clients that this is an industry of skilled employees who should be paid at a rate commensurate with the work undertaken and that those rates be reflected in tender pricing."

Retailers are likely to either increase prices or cut jobs to be able to pay the new NMW, according to credit-rating agency Moody's.

- See Business Planning, p32.

Industry comment

Carol Paris, chief executive, HTA

"As a people-based service industry the impact of an increase in the minimum wage presents a huge challenge for horticultural industry. We are looking at what mitigating factors will help us to deliver this and achieve efficiencies to counter the additional costs."

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