The National Living Wage (NLW) government policy target is to increase the NLW to £9 per hour by 2020. Explain two possible impacts of this policy on the UK supermarket industry.

Increased labour costs, many staff on minimum wage. This could impact on competitiveness against other supermarkets, as prices may have to be increased to match the increase in costs, so customers may switch. (e.g. Sainsbury's to Aldi)There may be very little impact on the supermarkets if wages are already set above £9 - supply and demand diagram showing a price floor.Also, other industries seeing rising costs may lead to increased revenues, due to higher disposable incomes.

AB
Answered by Alex B. Economics tutor

1930 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

How do interest rate changes affect economic growth?


Define a monopoly and explain its positive and negative impacts on the economy.


Explain two benefits to the government that falling unemployment provides.


Explain why a government budget deficit is likely to stimulate economic growth.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences