Living wage could force closure of 24,000 small shops, report claims

The government's plan to introduce a new national living wage could mean thousands of local shops would be forced to close, putting 80,000 jobs at risk, an industry body has claimed.

The Association of Convenience Store (ACS) said that the total cost of a £7.20 national living wage will be £166m across the convenience sector. Corner shops would have to deal with a £11m bill, while village stores would face £23m in extra costs.

An inability to pay the increased wage could threaten the future of 24,000 shops, ACS warned, with the increased employment allowance, announced alongside the national living wage in the Summer Budget, providing "comparatively small compensation for convenience stores".

James Lowman, ACS chief executive, commented: "We have always supported a national minimum wage, but the move to a higher compulsory national living wage will have a devastating impact on our sector.

"Our analysis only looks at the increase to a £7.20 national living wage from 2016, and as this rises to £9 by 2020 there could be far greater effect than even these figures suggest. This analysis is backed up by evidence provided by our members which shows that they will be closing stores and laying staff off as a result of this policy.

"The chancellor must face up to the impact of the national living wage on businesses, and continue to let the independent Low Pay Commission set rates through to 2020. The government also needs to look at other ways of supporting retailers hit by this new burden."

At the Times CEO Summit last week only 6% of the large company bosses attending the event said that the national living wage would damage their business. However, at a related event for small business owners, a much higher proportion raised their hand when the same question was asked.

What are your thoughts on the national living wage? What impact would it have on your business? Post your comments below.