National Living Wage: pricier weekly shop

Shoppers can expect to pay more for their groceries as a result of the National Living Wage, it has been claimed.

All employers will be required to pay staff at least £7.20 an hour from next April, rising to £9 an hour by 2020.

Hargreaves Lansdown senior analyst Laith Khalaf said all supermarkets will face increased staff costs as a result.

"Seeing as they are all in it together, they will probably pass the costs on, which would mean an end to plunging prices across the food aisles," he said.

It comes a day after Whitbread, the owner of Costa Coffee and Premier Inn, warned it could push up prices as a result of the new wage policy.

And given that many companies currently pay some of their staff less than this amount, Mr Khalaf suggested firms across the board will follow suit and hike prices.

"Paying more for cappuccinos and onion rings could be the thin end of the wedge when it comes to the Living Wage pushing prices up, because Whitbread won't be the only company facing these issues," he said.

"Businesses across the hospitality and retail sectors in particular will somehow have to manage the additional cost, which means higher prices for customers, lower profits for shareholders, or some combination of the two."

Mr Khalaf offered five tips for consumers worried about the rising cost of their supermarket shop:

- Draw up a list - and stick to it. Avoid impulse buys you do not need.

- Do not leave your loyalty card at home. Most shops have some sort of loyalty scheme - make sure you earn points every time you spend.

- But do not be too loyal - take advantage of the big discounts available on your first online supermarket shop.

- Be wary of bulk-buying - it is only a saving if you use it all. Think carefully whether you are likely to end up throwing some or all of it away.

- Shop at the end of the day - you will often find fresh goods reduced to clear.

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