Retailers need to improve productivity in order to pay their staff more, according to a new Government report.

The Industrial Strategy white paper said retail, tourism and hospitality’s “lower average productivity levels” and the large number of people the sectors employ makes them prime opportunities for improvement.

In the document, the Department for Business, Energy and Industrial Strategy (DBEIS), pledges to “work closely” with retailers to increase productivity. It said it would do this “in order to be able to progressively drive up the earning power of people employed in these industries and enhance our national productivity".

However, convenience store owners struggling with increases to the national minimum wage told Retail Express that because nearly all retailers have already slimmed their overheads as much as possible, there’s little room left for further efficiency savings.

Dave Allen, owner of Hogshill Stores in Beaminster said: “All we can do is increase prices or cut hours. Both options are bad for staff, customers and store owners.

“If the Government wants to help improve productivity, it needs to help us. A VAT cutback to 15% or financial support measures for local shops would help it meets its objectives.” 

Last week, the Government announced the minimum wage would be increasing by 33p per hour in April, giving struggling retailers four months to find an additional £633.6 per year, per full-time staff member.

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