Propel Morning Briefing

Hospitality firms facing further pressure on bottom line as living wage increases

Hospitality firms are facing further pressure on their bottom line following an increase in the living wage.

The voluntary Real Living Wage has risen 30p to £8.75 per hour and by 45p to £10.20 in London.

Unlike the National Minimum Wage, the living wage is an hourly rate of pay set independently and updated annually that is calculated with reference to the basic cost of living in the UK.

It is consistently slightly higher in London than it is outside of the capital. At least 150,000 workers across the UK, including those in hospitality, are set to receive a pay rise following the announcement by The Living Wage Foundation.

It followed a report by professional services firm KPMG over the weekend that showed more than a fifth of people working in the UK are still earning a salary below the living wage.

The research found 78% of employees earning less than the real living wage forecasted a jump in living costs over the next year, while just 2% anticipated a fall.

Colliers International head of alternative markets James Shorthouse said: “While these salary increases may on the surface seem like positive news for staff working across the UK, for employers who have signed up to the Living Wage Foundation’s recommended £8.75 per hour nationwide and £10.20 in London, the news presents a further challenge to hospitality and food and beverage 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.”


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