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Real living wage rise could increase pressure on hospitality businesses

06 November 2017 by
Real living wage rise could increase pressure on hospitality businesses

The increase in the real living wage is good news for employees but could put more pressure on hospitality businesses.

The Living Wage Foundation today announced the new UK living wage of £8.75 per hour, an increase of 30p per hour, and £10.20 in London, an increase of 45p per hour, with at least 150,000 UK workers set for a pay rise.

Of more than 3,600 businesses that are signed up to the voluntary scheme, 104 are hospitality businesses, including Brewdog, ‘Deliciously' Ella Woodward's Mae Deli and the Haytor hotel in Torquay.

James Shorthouse, head of alternative markets at real estate firm Colliers International, said: "While these salary increases may on the surface seem like positive news for staff working across the UK, the news presents a further challenge to hospitality and F&B operators who face even more pressure on their bottom line adding to Brexit challenges, rent and business rates rises, and increased input costs from imported items."

The real living wage is separate from the statutory National Minimum Wage and National Living Wage, and is set by the Living Wage Foundation, not the government. Employers pay it voluntarily.

Living Wage Foundation director, Katherine Chapman said: "The new living wage rates announced today will bring relief for thousands of UK workers being squeezed by stagnant wages and rising inflation. Great businesses know that, even during these tough times, not only is fair pay the right thing to do but paying the real Living Wage brings big benefits."

The 2017 increases have been largely driven by higher inflation, with rising rents and transport costs also having an impact.

Viewpoint: Disparity between pay rates in public and private sectors is an inconvenient truth >>

Levi Roots' Caribbean Smokehouse pioneers real Living Wage >>

Viewpoint: Employers must absorb extra wage costs >>

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