Pets at Home has promised to pay all its staff the national living wage (NLW), regardless of their age, when the new minimum rates come into force next April.
The pet supplies chain, which reported a better-than-expected 11.8 per cent rise in pre-tax profits to £45.2m for the six months to 8 October, said the introduction of the NLW would cost it an extra £2m to £3m a year. It currently pays a starting salary of £6.79 a hour.
Employers will only have to pay the Chancellor’s new NLW – which is set to start at £7.20 an hour – to staff aged 25 and over, but the retail industry is currently split over whether to have all workers start on the same rate regardless.
Several, including the fashion giant Next and bicycle seller Halfords, have said they will only pay the new minimum level to their older staff. Others, including all the supermarkets except for Asda, and high street giants such as Marks & Spencer and John Lewis, have already promised wage parity for their workers.
As revealed in a survey by The Independent, a significant proportion of high-street businesses are still to announce their plans – which, with around one in three of the UK’s 5 million retail employees aged under 25, leaves thousands of workers wondering whether they can expect a pay rise alongside their colleagues next year.
Separately, the pubs group Mitchells & Butlers warned that it might have to hike prices because of the introduction of the NLW and the impact that it will have across the hospitality sector.
The All Bar One and Harvester owner said that underlying profits had edged up by £3m to £126m in the year to 26 September as like-for-like sales rose just 0.8 per cent. It repeated its summer warning that the NLW will be a “cost headwind” that the sector could not completely “control” by cutting costs.
Mitchells, which has more than 44,000 staff, faces a £15m hike in its annual wage bill when the NLW is introduced, although it also noted that the pay rate could mean customers have higher incomes.
The hospitality sector has the highest proportion of jobs paying the state minimum wage, according to Deutsche Bank’s analyst Geof Collyer, who estimates that by 2018 Mitchells’ staff costs could rise by almost 11 per cent, or £66m, because of the NLW.
Total sales at the group, including last year’s acquisition of Orchid pubs, rose 6.6 per cent to £2.1bn and it announced a return to the dividend list after seven years, promising investors a payout of 5p a share.
