It’s been less than a week since the national minimum wage (NMW) went up to £5.52, and fervent debate among retail groups has ensued.
The British Retail Consortium (BRC) claims last year’s rise cost the industry £1.7bn and led to a 12% rise is shop floor staff bills. The organisation made the point that the effects of NMW increases are particularly dramatic for small retailers who spend, on average, 25% of turnover on wages.
However, the British Shops and Stores Association (bssa) today argued against the BRC assumption that minimum wage increases spell trouble for independent retailers.
The group argued that unlike large retail multiples, smaller independent stores have a habit of paying their employees well above the minimum wage anyway.
According to the organisation small retailers attach an ‘overriding importance’ to ‘both recruiting and retaining the quality staff they need to differentiate themselves from the high street multiples.’
Bssa chief executive, John Dean said: “With multiples constantly focusing on cost-cutting, both in-store and through pressure on the supply chain, independents have realised that they can’t always compete on price but that they can win on service and that’s clearly what they are committed to delivering.”
The bssa survey also suggested that more than half of independent retailers already give their staff more than the new 28-day holiday entitlement due to come into force in August 2009.
Some conflicting reports then from the two retail groups. There’s no doubt that if you pay your team minimum wage, the latest hikes will have added to your bill. But is the bssa right? Is it the multiples that rely on scraping by on paying the lowest possible salaries?
Are you an independent retailer? Do you pay your staff minimum wage or feel it’s simply not enough to keep the best employees? Tell us in the comments box below.
