Large retailers could see their wage bills increase by an average of £25.6m by 2020 with the introduction of the new living wage, according to a new report from PwC.
The accountancy firm surveyed more than 100 companies with an average of 11,000 employees and found that businesses expect to pay an extra £1.6m in wages next year, equating to £11m by 2020.
Retailers expect the sharpest jump both in 2016 and over the next five years, with average wage bills rising by £3.8m in 2016 and £25.6m by 2020.
“While many employers should be able to afford the increase to their wage bill, the disproportionate impact on sectors employing a large number of lower paid workers such as retail, transport and logistics, healthcare and hospitality and leisure cannot be ignored,” said John Harding, employment tax partner at PwC.
“Organisations must have a plan to deal with these costs, that isn’t simply passing them onto consumers or reducing headcount.”