The Low Pay Commission has acknowledged industry concerns about wage costs in a report outlining its recommendations for the new higher national living wage and national minimum wage rates, which take effect next April.
It has recommended that the NLW remain on its path of 60% of median earnings by 2020, with an increase of 4.9%, or 38p, to £8.21 an hour in April.
It has also recommended that the 21 to 24-year-old NMW rate should increase by 4.3%, or 32p, to £7.70 an hour. The rate for 16-17s should increase by 3.6%, or 15p, to £4.35, it suggests, and the apprentice rate by 5.4%, or 20p, to £3.90.
The report acknowledges in its evaluation convenience stores’ “most pressing concern” - wage costs.
It also recognises that 75% of convenience retailers are reducing the number of hours that they employ staff for and 60% are increasing the number of hours they personally work to manage the impact of increased wage rates.
The report cites the ACS’s belief that larger companies in the convenience sector are starting to look at other aspects of pay and reward to offset the cost of the NLW.
The Federation of Wholesale Distributors emphasised that wholesale was a sector particularly affected by the impact of the NLW.
About 30% of the wholesale sector’s workers earned less than the £7.20 threshold before the NLW’s introduction, the report notes.
Food and drink manufacturers reported that some of them were unable to pass costs on to supermarkets, and the FDF thought most were paying more than the NLW.
“We are pleased that the Low Pay Commission has listened to our evidence and has continued to set wage rates based on thorough and objective economic analysis,” said ACS chief executive James Lowman.
“ACS will continue to engage with the Low Pay Commission to ensure that they consider the impact of higher wage rates on businesses and help them to set their wage rates beyond 2020.”
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