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Press Release

RETAILERS CALL FOR OVERHAUL OF MINIMUM WAGE

5 December 2005

In its submission to the Low Pay Commission (LPC), the British Retail Consortium (BRC) has called for a fundamental review of the ultimate goal of the National Minimum Wage (NMW).

The BRC believes the NMW has reached the ‘tipping point’ and that an increase to £5.35 in October 2006, could lead to around 35,000 jobs being lost and could create an additional cost of £1.13 billion to the retail sector.

In a recent BRC survey on the impact of the NMW, submitted to the LPC in evidence, 11% of the retailers surveyed said they would consider job cuts if the proposed 6% increase to £5.35 goes ahead in October 2006. The survey also revealed that the rise to £5.05 has already cost retailers £1.21 billion.

Dr Kevin Hawkins, BRC Director General, said: “At its current level the NMW is now having a serious impact on retailers of all sizes. Most retailers have been cutting their prices and given the outlook for consumer spending, expect to continue doing so. They simply cannot go on absorbing further increases in their fixed costs - of which labour is one of the biggest.

“The trading climate throughout 2005 has been tough and is likely to remain so. Retailers are having to absorb some big cost increases in other areas and we feel the NMW is now reached a level where we need to take stock of where we are going. In depth discussions about whether the costs are now outweighing the benefits need to include a review of the ultimate goal of the NMW.

“It is crucial that in this uncertain retail climate, future increases in the NMW are kept at a level which businesses can afford to pay.”



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British Retail Consortium

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