The Association of Licensed Multiple Retailers (ALMR) has urged the Low Pay Commission to show caution on future National Living Wage and National Minimum Wage rate rises.
Responding to the Low Pay Commission's consultation on wage rates, the ALMR has urged it to avoid any wage increases that might add to the pressure on businesses already suffering due to tightening margins and political instability.
The letter predicts that "any considerable wage increases could seriously limit the sector's ability to invest in sustained job creation, training and growth".
Research by the ALMR and Ernst and Young forecasts that the hospitality sector provides an additional 19,000 jobs and is set to contribute an additional £50b to economic turnover by 2020.
However, potential investment may be threatened by additional costs to employment, the ALMR said. The research shows that the cost of the introduction of the National living Wage on the hospitality sector could be over £1b.
ALMR chief executive Kate Nicholls said: "We are seeing unprecedented cost pressures eroding eating and drinking out margins, and significant increases could threaten investment and put jobs at risk. Employers have already had to swallow a significant wall of costs in the form of recent wage increases and continually mounting property costs.
"Businesses in the sector are committed to developing their workforces, but recent increases in wage rates have not led to increased spend at tills for businesses. Some employers have had to adjust the number of hours they offer staff as a result of increased wages.
"With uncertainty around Brexit providing only instability for businesses, now would not be the time to drastically increase wage rates. The Low Pay Commission should act with care if it wishes to avoid risking future investment and jobs in the UK."
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