Gifts Today magazine

Will small shops suffer?

The National Living Wage in the UK has risen. The British Independent Retailers Associations discusses when this is good for small shops

Small shops will have to cut jobs or hours, or both, as a result of the new National Living Wage announced in the latest Budget.

Asked by bira if the new rate of the National Minimum Wage, initially £7.20 per hour rising to £9.00, would result in fewer, more or the same number of jobs they replied:

Fewer 63%
Same 31%
More 3%
Unknown 3%
This provides confirmation of the Chancellor's own announcement that 60,000 jobs would be lost as a direct result of the new rate.

This is not speculation in a vacuum either. More than a third of members have reported reducing employee numbers and hours because of increases in the NMW. Most notably 90% of businesses with a turnover between one and three million have done this, according to responses to the bira wages survey.

The association calculates that the concession of £1,000 on National Insurance would compensate for less than a year's worth of the increase in the rate for one full time employee - a largely empty gesture.

Small retailers, even those forecasting no immediate effect, expressed greater concern about the clearly mapped future for the rate. To rise from £7.20 in 2016 to £9.00 will require four sequential annual hikes of 6%. What this means for the political independence of the Low Pay Commission is of concern to the association.

CEO Alan Hawkins commented: "This will be a body blow to small shops if the government simply imposes this huge jump in cost on a sector already struggling to cope with falling prices, additional pension costs and ever increasing and punitive business rates. It emphasises the need for the Treasury to push ahead quickly with its promises to review and reform this damaging tax if small shops are to have a hope of coping with this unexpected new burden."

About Bira
The British Independent Retailers Association (bira) is the voice of independent retailers.  Its aim is to provide first class support, business services, free advice and specialist representation to its members helping them to trade more effectively, profitably and sustainably for the future.
bira Retail Membership is open to independent retailers across the UK from single retail outlets to small chains, department stores, dealers and merchants, as well as Associate Membership for suppliers, manufacturers and distributors to the independent retail sector.
bira membership connects members with a national network of like-minded retailers, giving access to free expert knowledge, support and access to a wide range of specialist business services, saving valuable time and money.
It is passionate about championing independent retailers in the UK and is continually evolving in response to the changing retail world and the needs of its members. In a highly competitive market, it helps independent retailers stay one step ahead.
The British Independent Retailers Association comprises six divisional trade associations across a range of industry sectors. Through dedicated committees, providing members with an industry voice and helping them benefit from the sharing of specialist trade and product knowledge.
  •  British Hardware Federation (BHF)
  • Fashion Association of Britain (FAB)
  • Cookshop and Housewares Association (CHA)
  • British Agricultural and Garden Machinery Association (BAGMA)
  • Pet Product Retail Association (PPRA)
  • Home Decoration Retailers Association (HDRA)
Find out more at: www.bira.co.uk or email info@bira.co.uk



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