Fears national living wage threatens retail sector in Portsmouth

One impression of what a redeveloped shopping centre at the heart of Portsmouth could look like.
One impression of what a redeveloped shopping centre at the heart of Portsmouth could look like.
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PORTSMOUTH won’t be immune from a national threat to the retail industry, a council leader has warned.

But Portsmouth City Council deputy leader Councillor Luke Stubbs said developing a new retail centre in the city centre would help stem the tide of expected job losses.

The British Retail Consortium has said up to 900,000 retail jobs could be lost and thousands of shops closed across the country over the next decade.

The BRC report names rising costs due to the National Living Wage and the new apprenticeship levy as among the causes of retail’s decline.

Cllr Stubbs said: ‘The increase in the National Living Wage is being done for all the right reasons but if you make it more expensive to employ people then it’s pretty obvious that fewer people are going to be employed.’

Cllr Stubbs the rise of internet shopping was also speeding the decline of traditional shops. He said: ‘The big goal for the city is to get a big retail centre built in the middle of Portsmouth which will provide employment. Those types of places are weathering the storm the best.’

Hampshire Chamber of Commerce deputy chief executive Maureen Frost said job loses in retail were inevitable.

Ms Frost said it was up to the government as well as business to look for solutions to preserve shopping precincts.

She said: ‘Whilst losing a significant number of jobs is a concern we need to be realistic and accept that the current model of high street retailing is flawed in the technological age.

‘Shopping habits have changed significantly over the past five years and it is increasingly difficult for high street shops to compete with online retailers who do not have the overheads of rent, business rates and insurance costs.

‘Government and Local centres need look outside the box, be innovative and come up with new ideas for preserving the look and feel of our high streets.

‘The retail sector will feel the major impact of the living wage and coupled with other taxes the decrease in this sector is inevitable unless we give the retail businesses the platform and flexibility to make shopping an experience rather than a purchasing decision.’

The National Living Wage for over-25s of £7.20 an hour comes into force in April, replacing the £6.70 per hour minimum wage.