Independent retailers believe next October’s national minimum wage increase could bring a much-needed boost to consumer confidence.
Indies contacted by Drapers said as they already paid their own store staff above the market level, the approved 15p rise to £6.08 per hour from October would have minimal impact on their costs. Most said they were hopeful the rise would put more cash in the pockets of their customers and boost spending.
The Government approved the 15p increase for those aged 21 and over last week. Rates for 18 to 20-year-olds will also increase by 6p to £4.98 an hour and rates for 16 to 17-year-olds will rise by 4p to £3.68 an hour.
Paul Turner-Mitchell, co-owner of young fashion indie 25 Ten in Rochdale, said: “It won’t have any direct impact on us as we pay a bit more [than minimum wage] but anything that gives consumers a bit more has to be good. Any moderate increase has to be good for increasing consumer confidence, especially with all the doom and gloom.”
Turner-Mitchell added that the rise of the personal allowance by £1,000 to £7,475 for those in the lowest tax bracket from April 6 meant minimum wage earners had received a “double bonus”, which could translate to sales.
Pamela Shiffer, owner of the eponymous two-store London premium womenswear indie, said: “A few extra quid in the pocket is always a good thing.”
Nicola Scott, owner of contemporary womenswear indie Bunty & Co in Pocklington, East Yorkshire, said although she wasn’t sure it would affect shopping habits it could “only be a good thing for the economy”.
However, independent retail trade body BHF-BSSA Group warned that the logic of ramping up the minimum wage was “deeply flawed”. It said increasing key costs for retailers at a time of weak demand would jeopardise both jobs and prospects for growth.
It added that the Bank of England could take the increase as evidence of wage inflation and could use this to justify interest rate rises, which would choke overall prospects for retail growth.