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Supermarkets might prefer young workers to limit living wage impact

Supermarkets could try to avoid hiring people aged over 25 and close more stores in a bid to minimise the impact of the new national living wage, according to credit rating agency Moody’s.

The agency has calculated that six million workers will get a pay rise as a result of the national living wage, which chancellor George Osborne introduced in the summer budget in July.

The new legislation requires companies paying the national minimum wage of £6.50 an hour to increase it to £7.20 an hour in April 2016 for people aged over 25. It will rise to £9 an hour by 2020.

Moody’s suggests that the initial rise to £7.20 “would not be overly taxing for retailers” but that an increase to £9 would have a material impact, according to The Guardian.

The credit ratings agency said Tesco’s profits would fall by 7% in 2017 and Morrisons’ by 10% if they do not take mitigating action.

It said the supermarkets Tesco, Asda, Sainsbury’s and Morrisons, which employ 750,000 people combined, could close stores, hire fewer customer service workers or people aged under 25.


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