UK retailers have cut 'nearly 4,000 staff' ahead of new national minimum wage rate

At least 3,700 shop workers have already been made redundant from leading UK store chains as a result of new technology rendering many low-skilled jobs obsolete

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About 4,000 shop employees have reportedly been made redundant this year as major retailers find new ways to save money  despite having to implement the national living wage.

The National Living Wage will increase from £7.20 an hour to £7.50 from April this year, taking it a step closer to the Government’s target of £9 by 2020, and retailers are expected to suffer a major blow from the change, at a time when supermarkets are locked in a fierce price war to fend off discounters Aldi and Lidl.

The Financial Times  has now reported that at least 3,700 shop workers have already been made redundant from leading UK store chains as a result of new technology rendering many low-skilled jobs obsolete.

Although publically supermarkets have insisted the shakeups are to ensure efficiency at stores, the FT reports that the changes were really made to offset costs.

“On a personal level, we all want to pay our workers more,” a top executive at one large retailer that has recently announced redundancies told the FT.

“But there’s going to be unintended consequences from what the government is doing. Automation that used to be too expensive is now cheaper than the people it can replace.”

Earlier this month, Sainsbury’s announced it will cut up to 400 jobs with 4,000 other employees facing a major change to their working hours following a recent review of its store operations.The role of price controller – a person who ensures that prices displayed on supermarket shelves are correct – will be removed.

John Lewis, last month, said it will cut nearly 400 jobs across the department store's restaurants and home-fitting services as a result of a reshuffle.Under the plans, the group said that employees would be able to “work more flexibly and ultimately open up opportunities for more skilled roles with more potential for career progression”.

British shops employ about 1.7 million people on wages close to the legal minimum, according to the British Retail Consortium, an industry lobby group.

The FT estimates that at Tesco UK , a 12 per cent increase in the £4bn salary bill would have nearly wiped out last year’s £505m operating profit.

A number of companies, such as Whitbread, the owner of Costa Coffee, have previously warned that the national living wage could lead to job cuts and price rises.

Last year, a number of companies changed their policies in relation relation to staff benefits following the introduction of the national living wage of £7.20 last year.

Fast-food outlet Eat has reportedly stopped paying staff during lunch breaks.

Caffe Nero also said it would no longer provide staff with a free lunch while on shift.

Economists have previously warned that the policy may harm those it is trying to help.

“I think it is going to be a threat. There are going to be job losses,” Sir Christopher Pissarides, who was awarded the Nobel prize for economics in 2010, told The Independent when the policy was announced last year.

About 60,000 jobs could go by 2020, according to the Office for Budget Responsibility.

John Lewis, Tesco and Sainsbury's were not immediately available for comment.

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