Businesses are now being hit with a raft of new increases, as parts of Labour’s Autumn Budget come into effect on 1^st April, piling further financial pressure on retailers across the region.

With an increase in employers’ National Insurance Contributions, National Living Wage and Business Rates, businesses are being hit with a triple whammy of rises.

Noted as being the largest increase to rates on record, it is the retail sector set to be hardest hit – it has long been the sector employing young staff, with many at school and university often experiencing retail as their first foray into the world of employment.

From CTNs to larger convenience stores, wholesalers and suppliers, they have been coming to terms with the full reality of what this will mean for their business, assessing the potential implications for them and the impact on their staff and businesses in both the short and long term.

One store owner told Neighbourhood Retailer that the cost to their business will be in excess of £15,000 per annum, while another revealed they had already cut their opening hours in a bid to address the incoming rises and have put planned expansion on hold also.

In a special feature in the next issue of Neighbourhood Retailer, we hear from several businesses across Northern Ireland, who have voiced their concerns and outlined clearly the impact these rises will have on them, painting a stark picture for many businesses across Northern Ireland.

Keep an eye out for the April issue of NR coming soon.

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The NPA is warning that pharmacies in Northern Ireland, could face at least £10 million of unplanned costs and risk being forced to cut back their services or in some cases consider closing altogether without urgent action from the government.

Many pharmacies are reporting of bills of tens of thousands of pounds which are unfunded, on top of managing the impact of funding freezes, leading to a number of closures.

On top of this, pharmacies also face increased business rates, further pushing up costs.

Neighbourhood Retailer first reported on this in March 2024 when a Belfast pharmacist drew attention to the fact that pharmacists across Northern Ireland were being stretched beyond their financial limits, as pressures of the last few years come to a head, and indeed were dispensing medicines at a loss.

Paul Savage, who owns Woodbourne Pharmacy on the Stewartstown Road, told NR that a 10% ‘clawback’ applied by the Department of Health was compounding the situation.

The revelation came after a Stormont Health Committee was told there was an urgent funding crisis in the sector, which is impacting the financial viability of community pharmacy here and could place the supply of medicines in pharmacy at risk.

Unlike other businesses, pharmacies are unable to increase their prices in order to meet the sort of unexpected rises set to come into force in April.

The NPA has said it will recommend its members take collective action, including cutting back their opening hours for patients, if these costs are not met by the government imminently.

Unlike GPs and other parts of the NHS, the government have yet to commit to meeting rises in National Insurance and National Living Wage announced in the Budget and are due to come into force in just five weeks’ time.

Around 90 per cent of an average pharmacy’s work is funded via the NHS, including the cost of supplying medication as well providing vaccination services, such as the flu and Covid-19 vaccine.

In this historic ballot run by the NPA, 99.7 per cent of said they would be prepared to take collective action for the first time in their history if their funding situation did not improve.

Nick Kaye, Chair of the National Pharmacy Association, said: “Pharmacies face a financial cliff edge at the beginning of April, with a triple whammy of rising National Insurance, National Living Wage and business rates all arriving at once.

“At the moment, they still have no certainty if any of these costs will be met, despite assurances for other parts of the health system including our GP colleagues.

“Pharmacies have shut in record numbers and those that are left are currently hanging on by their fingernails.

“They are growing increasingly concerned about their future and without imminent funding certainty from the government we may be left with little choice but to recommend collective action to ensure pharmacies can survive for the patients who rely on them.”

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From 1^st April 2023 the National Minimum Wage (NMW) and the National Living Wage (NLW) will rise by the largest amounts since the NMW was introduced in 1998. This will come as a nasty shock to many convenience and fuel retailers who also need to cope with steep increases in energy costs at this same time.

The new NLW rise means the cost of a typical employee, working 37.5 hours a week will jump from £451 a week to £495 when wages, National Insurance and holiday accrual are taken into account.

PREPARE FINANCES

S4labour is an established rotas, people, and payroll solution, which manages labour planning and costs with accuracy and ease. The system offers full control of rota budgets with visibility of weekly, daily and even hourly costs, so retailers know what they are paying out before they have overspent their budget.

Garry Craft, S4labour, Managing Director Convenience Stores, said: “It is essential that every independent business takes note of the changes due to take effect in April and reviews their workers’ pay rates where applicable.

‘The NMW and NLW threshold changes can create additional work for independent retailers, putting pressure on them to balance new budgets and overheads’

“We are advising independent retailers to ensure they are commencing increases from the correct date in April. These new changes will impact the profitability of every store, so they should prepare their finances accordingly.

“We make the changes automatically for all existing clients whether they pay their employees on a weekly or monthly basis.”

NAVIGATING CHANGES

The NMW and NLW threshold changes can create additional work for independent retailers, putting pressure on them to balance new budgets and overheads. Navigating these changes requires the right information and processes – and with the correct tools from S4labour, retailers can deliver better controls, planning and workflows, and reduce risks of compliance failures.

“It can be expensive for retailers to run their own payroll in-house. We have a cost-effective option available which helps those who do not have the time or the trained staff to do this in-house. Once hours are confirmed for store employees, payroll is processed without any further work from the employer,” added Craft.

The S4labour app is updated automatically, so retailers employing teams of people never need to worry about implementing new regulations and can focus on working in their stores and providing their local communities with excellent service.

TOP TIPS

Tips for retailers from S4labour:

*Get visibility of what you have been spending so that you can start to see the areas you might be overspending. The only way to do this is with a system that gives week-by-week and day-by-day insight into what you are spending, rather than just looking at totals for the quarter.

*Get visibility of what you are spending before you have spent it, so you are not burdened with any unexpected costs. Seeing your costs as you build the rota has a significant impact on efficiencies, and you can avoid finding out too late from the accountant that you have overspent.

*Ensure you are paying for actual hours worked. Benchmark data shows that the introduction of digital time and attendance saves on average 15 minutes per employee per week compared to relying on inaccurate timesheets.

*Make time savings where you can. S4labour are experts in reducing admin, which can save hours when taken out of the back office and management and returned to the shop floor.

*Get more out of your team. Driving the engagement and motivation of staff with effective communication makes a big difference to how well your labour is spent. Using a team app as a point of truth for shift allocations and tasks will increase productivity for every shift.

S4labour will be exhibiting at stand AA369 at the National Convenience Show from 24^th to 26^th April at NEC Birmingham. Anyone looking to hear more about their rota, people and payroll solution, are encouraged to visit the team or get in touch via the website www.s4labour.co.uk/convenience-stores

The post Retailers should plan for ‘National Living Wage rises as soon as possible’ first appeared on Neighbourhood Retailer.

The latest Real Living Wage update sees the entry rate increase from £9.90 to £10.90 per hour.

Lidl Northern Ireland today confirmed that it would match the hourly rate for more than 1,000 employees, representing an investment of more than £1.4 million by the retailer into annual wages and its second pay rise in the last 12 months – with hourly rates rising by £1 as a result.

Northern Ireland’s fastest-growing retailer, Lidl Northern Ireland was the first major nationwide employer to commit to paying the real Living Wage in 2015 and since then has matched rates year on year.

The Real Living Wage reflects the real cost of living in the UK which considers key living costs such as clothing, food, housing, health, education, transport and social or recreational costs.

Higher than the government-set ‘National Living Wage’, the pay level advised by the Foundation serves as independent guidance for employers. Its adoption is voluntary, and organisations are free to choose whether to implement it.

Maeve McCleane, Chief People Officer at Lidl Ireland and Northern Ireland said:“Our people have always been pivotal to our success which is why we continue to make sure that Lidl Northern Ireland is not only an exceptional place to work but also provides an unrivalled inclusive, rewarding and fulfilling culture for every employee.

“As part of our commitment to our employees, we are delighted to confirm a new pay rise for more than 1,000 team members across the region which matches the rates advocated by the Living Wage Foundation. Lidl Northern Ireland continually reviews its pay rates to ensure it offers the most competitive compensation and benefits to attract, train and retain its best employees to help serve more than 300,000 local shoppers every week.”

According to latest figures released by Kantar Worldpanel, Lidl is consistently confirmed as ‘NI’s fastest-growing supermarket’ with 12.6% market share growth over the last two years and holding a 7% market share of the region’s overall grocery market.

For more information visit www.lidl-ni.co.uk

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This is different from the compulsory National Living Wage, which is currently £8.91 an hour for anyone over the age of 23. Real Living Wage employers in London will pay £11.05 an hour, a 20p rise.

Latest research by the Living Wage Foundation shows that there are still 4.8 million jobs – 17.1% of all employees – still paying less than the Real Living Wage in the UK.

Northern Ireland had the highest proportion of jobs paying below the Living Wage at 21.3%, while south-east England had the lowest at 12.8%.

Workers from ethnic minority groups are also more likely to be low-paid, with 19.4% of these workers earning below the Living Wage, compared with 16.3% of white workers.

Almost 9,000 employers throughout the country have signed up to the policy – 3,000 of them during the pandemic.

Companies include half of the FTSE 100 and big household names such as Everton Football Club, insurer Aviva, luxury goods brand Burberry and the Nationwide building society.

The recommended rate is intended to ensure all staff earn a wage that meets the real cost of living and covers everyday needs.

The Living Wage Foundation’s director, Katherine Chapman, said the new pay rates, which apply from Monday, would “provide hundreds of thousands of workers and their families with greater security and stability”.

“It is still a pound, two pounds higher than the [national] minimum wage and that makes a huge difference. That means not having to worry about putting food on the table, or paying the bills at the end of the month.

“And we’ve seen record numbers of employers signing up this year because ultimately they want to do the right thing by their workers.”

TUC general secretary Frances O’Grady said that the organisation’s report showed that low pay was “endemic”, with millions of workers in jobs that do not fully cover their bills.

“With Britain in the middle of a cost-of-living crunch, it’s time for the government to act,” she said.

“Ministers must start by increasing the minimum wage to £10 immediately, banning zero hours contracts and giving trade unions greater access to workplaces to negotiate improved pay and conditions.”

At the Budget, Chancellor Rishi Sunak announced that the National Living Wage will increase next year by 6.6%, to £9.50 an hour. The Universal Credit taper rate will also be cut, allowing claimants to keep more of the payment.

Usdaw leader Paddy Lillis said that the new rate of £9.90 per hour and £11.05 in London was welcome but that the union would continue to call for at least £10 per hour for all ages.

He added: “Many of the key workers who have helped us through the pandemic earn less than the real Living Wage.

“The public’s appreciation for the efforts of key workers delivering essential services is welcome, but that doesn’t pay the rent or put food on the table.

 “So the new Living Wage rates are welcome, which are based on an individual’s cost of living and clearly show that the Government’s so-called ‘National Living Wage’ is nothing of the sort.

“Usdaw has consistently campaigned for at least £10 per hour immediately for all workers over 16, which would abolish rip-off youth rates.

“If you’re old enough to do the job, you’re old enough to be paid the rate for the job.”

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