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Press Release

MINIMUM WAGE: THE IMPACT ON RETAIL

26 September 2005

The British Retail Consortium (BRC) has today issued its fifth survey looking into the impact national minimum wage increases have on the retail sector.

This follows the Governments decision to raise the adult national minimum wage to £5.05 on 1 October 2005 and the Low Pay Commission’s recommendation for another 6% increase (£5.35) in October 2006.

The survey results, to be published mid November, will show the projected impact of an increase to £5.35 and the likely impact of the increase to £5.05, soon to come into effect. It will include wage differentials, staff turnover, redundancies and benefit packages. The 2004 survey showed that the rise to £4.85 cost retailers £1.7 billion.

Kevin Hawkins, BRC Director General, said: “Above inflation increases to the minimum wage are proving very difficult for both larger and smaller retailers to absorb - especially in today’s tough trading conditions.

“Recommendations for the October 2006 level should be made in light of the state of the economy at the time. With slow retail sales growth and an uncertain economic climate, retailers are becoming very apprehensive that the Low Pay Commission will endorse its recommendation of £5.35, which could severely impact upon wage differentials, recruitment rates, benefit packages and redundancies.

“The retail sector employs 2.8 million people - 11% of the UK workforce. Ill thought out decisions on the minimum wage will hit retailers hard. This survey will give a clear indication of how the retail sector is affected by these rises and we will be presenting the evidence to the Low Pay Commission.”



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British Retail Consortium

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