Dunelm boss: A rise in the living wage is good for our company
The boss of Dunelm has said that an above-inflation increase to the minimum wage will have a positive effect on the home furnishings giant, despite a flurry of retailers decrying the increased bill.
Dunelm chief executive Nick Wilkinson said that the resulting increase in consumer confidence – due to higher disposable income – will ripple through the market and boost demand.
His comments are starkly optimistic compared to many other retailers in the sector, who have said that a higher wage bill – in part due to the national wage and in part due to higher employers’ national insurance contributions (NICs) – will cause “inevitable” job losses.
The British Retail Consortium said that the increase in the minimum wage would cause retailers to spend an additional £2.73bn per year, a key contributor to the £7bn in extra costs post-Autumn budget.
Reeves announced that the minimum wage would rise by 6.7 per cent next year, a larger rise than many firms had expected.
The headwinds from the wage increase are even higher than NICs, with the higher living wage to add an extra £2.33bn to firms’ costs, according to the BRC.
But Wilkinson said as long as there is “sufficient notice of what’s coming down the line and there are no surprises”, it’s possible to manage the business to accommodate minimum and living wage changes.
“Those national living wage increases are also going into the consumer market… we have many more customers than we do employees, so in general it’s very good for us to see consumer confidence growing, disposable income increasing [and] pay going up slightly higher than the level of inflation… Those are all good impacts for us,” he said.
“Managing [costs] within our own business is something we’re pretty good at doing, but the longer the lead times and the less surprises there are the better.”
Wilkinson’s comments come as Dunelm prepares to open its first central London store in Stratford’s Westfield shopping centre.