The boss of Currys has accused the government of failing to understand or care about UK retailers by pushing through a “big hike” in the UK’s minimum wage.
Alex Baldock’s comments come weeks after the chancellor, Jeremy Hunt, announced plans to increase the legal minimum wage for the UK’s lowest paid workers to £11.44 an hour, representing a rise of almost 10%, from April 2024. The move will force employers to pay full-time workers about £1,800 more per year.
Nevertheless, the boss of the electrical retailer said this would put significant pressure on high street retailers like Currys, which are also preparing for a surge in business rates – the property-based tax levied by local councils from businesses such as retailers, pubs and offices.
“We believe we are paying our colleagues well and we certainly intend to continue to,” Baldock told reporters on Thursday morning. “That said, for the retail industry as a whole, having a big hike in the ‘national living wage’ at the same time as an expected half a billion pound increase in the rates bill just shows how little the government appears to understand or care about this industry.
“There are 3m jobs at stake in UK retail, and loading more costs on to an already overburdened sector is irresponsible, and we call for a change of heart on it.”
High street shops are preparing for a collective £1.95bn inflation-linked increase in local taxes next year. Hunt froze business rates last year for companies in retail, leisure and hospitality, and granted a 75% discount worth up to £110,000 per business. Those discounts are set to expire in March 2024.
Baldock’s criticism came as Currys reported a 4% drop in like-for-like sales over the six months to October, as the cost of living crisis left consumer spending subdued.
The chief executive said there were a mix of factors at play. “On the one hand, the consumer is hard pressed and confidence is pretty bumpy. Interest rates have been rising … and consumers are cautious about their spending. But on the other hand, real wages have continued to climb, employment has stayed high, people have retained savings and customers are treating themselves.”
He said consumers were more likely to buy products on credit offered by the company, which allowed consumers to spread the cost of their purchases over a number of months.
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But Baldock stressed that the company was being responsible with its lending, and wanted to “stay a mile away from any reputational damage that comes with lending money to people who can’t afford to pay it back”.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
