ACS calls for freeze on minimum wage

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The ACS (the Association of Convenience Stores) is calling on the Low Pay Commission to recommend a freeze in the National Minimum Wage (NMW) after 1 October 2010 claiming two in five convenience stores have laid off or not replaced staff in the past year because of pressure of employment and business costs.

As part of its submission to the Commission made today, ACS surveyed members to understand the impact of recent National Minimum wage increase and other business pressures. The survey was representative of 500 convenience stores and 10,000 employees in the sector. It found that:

  • 42% laid off staff in the last 12 months
  • 50% reduced staffing hours in the past 12 months
  • 52% report reduced wage differences between junior and supervisorial staff
  • 56% register an impact on their business investment plans; and
  • 50% believe they have been rendered less competitive by recent increases

James Lowman, ACS chief executive, said: ‘It has been a testing 12 months for local shops as they face pressure to bear down on costs, this has led to many having to reduce their staffing bill. For some this has meant letting people go, and others reducing staff hours. Now is not the time is to put job at risk through an unaffordable minimum wage rise.

“We welcome that this year the Commission has been asked to focus in particular on the competitiveness of small firms. Our survey shows that there is no doubt that small firms have the toughest challenge of all in finding ways to take costs out of the business. Employment costs are the largest outgoing for retailers, representing an average 12 per cent of their turnover. Another increase in National Minimum Wage would not be conducive to supporting employment within our sector or nationally.

“ACS is well established as an important voice in the Low pay Commission’s process, we look forward to giving evidence before the Commission and will make our case clearly for restraint in this difficult economic period.”

Each year the Low Pay Commission is asked to monitor, evaluate and review the rate of the minimum wage and make a recommendation to Government. This year the Low Pay Commission was tasked with an additional priority to fully consider the impact of NMW on the competitiveness of small firms. ACS has given evidence to the Low Pay Commission in every review since 1999. This year ACS will be giving oral evidence to a hearing of the Commission in November.