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Published
Mar 22, 2017
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Nearly 4,000 retail jobs have been cut this year as new minimum wage takes its toll

Published
Mar 22, 2017

An estimated 3,700 shop workers have been made redundant from British retail chains in 2017 as the impending minimum wage increase spurs retailers to use workers more efficiently.



According to the Financial Times, retail companies including John Lewis, J Sainsbury and Tesco are introducing automated systems and other innovations to make do with fewer employees, thus reducing the impact of the new national minimum wage on their operating profits.

From 6 April, retailers will have to pay 25 year old workers £7.50 an hour, a 4% increase from £7.20, as part of a wider plan to lift the hourly rate to £9 by 2020.

Retailers are expected to suffer a major blow for the change, as 1.7 million people are employed on wages close to the legal minimum according to the British Retail Consortium.

This adds to further pressures affecting retailers, including an increase in property taxes and rising import costs as a result of the pound’s decline.

“A lot of the firms are absorbing the cost at the moment by lowering their profits or maybe increasing prices,” said Matthew Whittaker, chief economist at the Resolution Foundation to Financial Times.

“They don’t have to make an immediate knee jerk reaction in the way that you would in a downturn. But over time they’ll think a bit more about their structure and their business model. If you look at [the government’s projections], there is an expectation that employment does fall,” he said.

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