John Lewis expresses concern over the upcoming rise in minimum wage, likely impacting employment costs.
- Head of distribution highlights challenges in accommodating wage hikes for 85,500 staff.
- National Living Wage set to increase by 6.7% to £12.21; Minimum Wage for young workers up 16%.
- Retailer faces scrutiny following comments on government tax policies’ impact on businesses.
- Concerns unveiled during discussions with The Telegraph amid broader economic challenges.
John Lewis has openly expressed worries regarding the impending increase in the national minimum wage, which is anticipated to affect the retailer’s employment expenses significantly. Currently employing approximately 85,500 workers, the company is apprehensive about the financial implications of this change, as articulated by John Munnelly, the head of distribution, in discussions with The Telegraph.
The National Living Wage, which will climb by 6.7% to a rate of £12.21 per hour in April, alongside a notable 16% rise in the National Minimum Wage for those aged 18 to 20, both represent substantial challenges for businesses like John Lewis. The organisation is attempting to navigate these adjustments while managing its ongoing business strategy.
John Munnelly candidly remarked, “We are. We’ve got to be honest. Everybody out there is worried about the National Minimum Wage and the Real Living Wage and being able to accommodate that.” This sentiment underscores the widespread concern among businesses about sustaining financial health amidst legislative changes.
These comments align with views from John Lewis Partnership’s chief executive, Nish Kankiwala, who has criticised the government’s approach to taxation, describing a recent tax initiative by Chancellor Rachel Reeves as detrimental to business interests. This tax policy, referred to as a “two-handed grab,” adds further strain on companies already adapting to increased labour costs.
John Lewis’s situation is reflective of broader economic pressures that many businesses face, particularly in the retail sector, where balancing operational costs with competitive pricing is crucial.
John Lewis’s concerns highlight the challenges businesses face in adapting to economic policy shifts while maintaining operational viability.
