Primark bosses have issued a start high street warning over staffing levels. Many major retailers have claimed that last week’s Labour budget will see costs soar after the government increased employer National Insurance. Placing the burden on businesses to sort the UK’s ailing finances, however, has gone down like a lead balloon.
Most major high street names have claimed they will have to cut costs to cover it – or even raise prices. And echoing those calls are the bosses at Primark. However, rather than increase their famous low prices, the company’s CEO has claimed that they will slash staffing levels and increase the use of automation across all stores.
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Speaking to the Drapers, George Weston, the CEO of Primark’s parent company Associated British Foods (ABF), said: “We are very reluctant to move our prices again so we will start off by looking for cost savings, things like self-checkout units [which can] save us labour in store. We are also automating our warehouses across Primark. I think we will be employing fewer people as a consequence of the automation in a year’s time.”
He also warned that cutting staffing levels might actually not be enough after Labour also announced the biggest rise to the minimum wage for several years. That will rise to £12.21 in April, which is a 77p increase for those over the age of 21, while those aged 18-20 will now get £1.40 more per hour at £10.
(Image: Bloomberg via Getty Images)
Even the rate for apprentices and 16-17-year-olds is rising by a whopping £1.15 to £7.55 per hours. Weston added: “The cost savings themselves will not offset the national insurance increases and the minimum wage increases in the UK. I think we have to see sales growth.
“We hope to see the increases in minimum wage leading to the least affluent with a bit of money to spend with us. We do a very good job for families who are not flush with money so maybe if they are feeling a bit less hard-pressed, we will benefit from that.”
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