Independent retailers must act now to reduce operational costs to bridge the “significant” National Living Wage shortfall, a symbol boss has warned, as a government survey reveals the majority of businesses aren’t prepared for the new legislation.
Londis brand director John Pattison told RN the group is looking at ways it can work with retailers to reduce day-to-day costs from credit card charges to electricity bills.
The advice comes in the same week business minister Nick Boles urged businesses to act now to “avoid falling foul of the law”, after a Department for Business, Innovation & Skills survey revealed 45% of businesses have updated their payroll and 39% have communicated the upcoming changes to staff.
“You have to start looking at all your cost lines immediately,” Mr Pattison said. “We have a guide figure [for the extra wage costs] and it’s a significant amount, it’s several thousands of pounds per store.
“We’re looking at a number of ways to assist retailers to get ready for the National Living Wage and it would include areas such as looking at reductions in day-to-day operational costs, whether that be electricity, bank or credit card charges.”
Jatinder Sahota, of Max’s Londis in Kent, has estimated the new wage will cost him an extra £11,500 a year across his two stores.
He told RN he has already been able to reduce his bills by 35% through changes including LED lighting and low-usage fans in fridges, but says his bottom line will be hit as he finds other ways to make savings.
“It’s going to be a struggle for a lot of businesses,” he said. “We have to raise our game across the board, and for stores that are already squeezing everything out to get as much potential from every square foot, it’s going to be even harder.”
Other retailers told RN they are still calculating the cost to their business and how to fund it.