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NEWS FEATURE

MANAGING YOUR PAYROLL

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10 ASIAN TRADER 4 OCTOBER 2024

he potential rise in the National

Living Wage (NLW) to £12.10 could

be a “tipping point” for many

convenience stores and wholesalers

unless the UK government steps in with

targeted tax relief, support and grants.

The Low Pay Commission (LPC) is on

track to raise the national living wage to

£12.10 an hour in April 2025, with the

possibility of suggesting an even higher rate

before the budget, following Labour’s

adjustment of its mandate to secure a

“genuine living wage”. Young workers are

likely to get an even bigger increase as

ministers say that 18 to 20-year-olds should

be paid the same as those older

than 21.

While this has been praised

as “good news” for low-wage

workers, key players in the

convenience channel argue it’s

a shortsighted move. Asian

Trader reached out to promi-

nent retailers, associations,

and wholesalers across the UK

to gauge their reactions, and

the concerns are palpable.

Trudy Davies, who runs

Woosnam and Davies News in

Powys in Wales, has always placed high value

on her staf as she believes they are the

ultimate face of the business. However, with

the expected rise pending, she is now facing

a dilemma.

Davies told Asian Trader, “I do think that

small businesses and in particular retail

stores like mine will be thinking very hard

about their opening hours and/or reducing

the number of staf . Reducing the number of

staf would mean that the business owners

themselves would be

forced to work even

longer hours.”

Julie Kaur, owner of

Premier Jules Conveni-

ence in Telford, shares

the same concern. Her

husband Joey, who man-

ages staf wages, fears

they’ll have no choice

In the convenience channel, both stores

and wholesalers are bracing themselves

to take some tough decisions to balance

expected rise in payroll expenses, says

Pooja Shrivastava

payroll expenses could force some to reduce

staf hours, cut back on hiring, or even

consider price increases that might turn

customers away. Small stores already feel

like they’re absorbing costs from every

direction, and this could be the tipping

point for some.”

NFRN (The Fed) National President Mo

Razzaq, who has more than 20 years’

experience in retailing, also fears the raise

will force several convenience stores and

newsagents to take some tough decisions,

such as reducing staf numbers and taking

on an extra load of work.

Razzaq told Asian Trader, “It will have a

big impact, and our members are very

concerned. Small independent retailers are

the backbone of their communities and as

responsible employers we want to ensure

we are paying a fair wage to our staf . But

the Low Pay Commission’s latest recom-

mendation of raising the national living

wage to as much as £12.10 would be a step

too far for hard pressed small businesses.

“As well as paying our staf more in

wages, we must pay more in national

insurance and pension costs, at a time when

many other costs, including energy costs,

are rising. There is no easy way for small

retailers to combat these increases.

“As so many of the products that

convenience store owners are price-

marked, we cannot pass these costs onto

our customers. The only solution available

to independent shop owners is to reduce

staf hours and staf numbers and, some-

how, take on even more hours ourselves.”

The Association of Convenience Stores

(ACS) echoes these concerns. The body, in a

written submission to the LPC, warned of

“unintended consequences” that NLW rises

can have, like a shift towards more gig

economy working, reductions in in-work

progression, entrepreneurship becoming

less attractive and a shortage of business

investment.

Fair wages versus survival

but to let an employee go.

Joey told Asian Trader, “If

the proposals go through, we

would be forced to possibly

let one member of staf go.

We need to see our expenses too, but we

also need to make sure there are enough

people on the shop ﬂ oor. These days we

need a couple of people more to look out for

shoplifters.

“The increased wages will come out of

our pockets and margins. When govern-

ment raises wages, it sounds like a goody-

goody move, but we forget that the wages

are coming out of someone’s pockets.”

Down in South London,

Nisa store owner Benedict

Selvaratnam (known as Ben)

anticipates a signiﬁ cant strain

on margins at his Croydon-

based Freshﬁ elds Market

store, when the rise comes

into ef ect.

Ben said, “The potential

rise in National Living Wage is

a double-edged sword for

many small businesses like

ours. On one hand, it’s clear

that employees deserve fair

wages, especially with the cost of living

increasing. But, as a business owner, this

increase puts a signiﬁ cant strain on already

tight margins, particularly for small,

independent stores that are still grappling

with rising costs across the board—wheth-

er it’s energy, supply chain issues, or other

overheads.

“Many small retailers are operating on

razor-thin proﬁ t margins, and adding to

Benedict Selvaratnam

Trudy Davies

Julie Kaur

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