Living wage ‘could cost 900,000 retail jobs’

RETAILERS are warning of 900,000 job losses when they are forced to implement the National Living Wage and other new costs.

Supermarkets have come under fire for giving staff low pay and relying on taxpayers to top this up with tax credits.

The National Living Wage will come into force next month at a rate of £7.20 an hour for the over-25s, replacing the present minimum wage of £6.70 per hour. It would then increase to £9 an hour by 2020.

A study by the British Retail Consortium (BRC) yesterday claimed this change will cost the industry up to £3billion by 2020. It said retailers were generally supportive of the idea, but the extra cost – coupled with other factors, including the popularity of online shopping – will inevitably lead to store closures and job losses.

Other costs are likely to come from business rates increases and the apprenticeship levy, which is due to be introduced in April 2017.

As a result, the study claims the industry could see as many as 900,000 jobs go by 2025.

Last week a leak revealed that Tesco, Britain’s biggest private sector employer, is carrying out a feasibility study that could see 39,000 store jobs go over three years.

Tesco confirmed the validity of the document but said it had modelled various scenarios. The group, which employs more than 300,000 in the UK, cut thousands of jobs last year as new boss Dave Lewis tried to turn around the company’s financial performance. The BRC said the retail industry was being reshaped by the digital revolution, with 15 per cent of sales now made online and 40,000 fewer shops than there were ten years ago.

Consortium chief executive Helen Dickinson said: ‘As an industry we expect the years ahead will see accelerating change.

‘Retailers will develop better propositions and compete harder across an increasing range of business models from modern multi-channel formats through to discounters and online businesses.

‘Recent policy announcements, in particular the national living wage and the introduction of the apprenticeship levy, will increase the pace of some of these changes.’