How bad will the Budget be?

In the event of increased costs, businesses have limited options. Unless margins are large enough or waste great enough for these costs to be absorbed, they have to be passed on somehow for the business to remain viable. This can mean higher prices where customers are willing and able to pay them. They can be met by lower staff  pay rises where pay is not already at a legal minimum. They can be met by overtime cuts or staff cuts, attempting to make existing staff do more. They may be met by attempting to streamline the business so that it needs fewer managers. Or they might be met by actually selling off less profitable parts of the business. 

Either way, if the business cannot afford to simply absorb the increased costs as most probably couldnt, they will have to be passed on somehow, in one or more of the above ways, depending upon which options are most viable for the business concerned.

Even in the same sector - eg retail in my case - different options might be open to different businesses. Waitrose for example broadly targets wealthier customers who are far more interested in quality and far less concerned about price. Waitrose might well be better able to pass on costs to customers in the form of higher prices than Tesco ever could for example, particularly on it's quality ranges. Tesco would probably have to do what it has already been doing - streamlining it's operation to need fewer managers and making the remaining ones do more, try to limit wage costs by less overtime and lower staffing levels, making existing staff far more multi-skilled for greater efficiency, and if necessary lower pay rises than would be liked. But Tesco is suffering chronically high staff turnover already as people keep leaving for better jobs, which is itself providing market pressure to keep pay as competitively high as they can reasonable sustain whilst remaining competitive. If pay ever fell to any legal minimum, Tesco would seriously struggle to recruit and retain enough staff to remain viable in some areas. Already it relies very heavily on younger workers. And this is because it pays the going rate for the job regardless of age. This means that even a 16 year old doing the same job as me gets the same £12.02 per hour as me. Which is I think as it should be. But this is so far above the minimum wage for this age group that Tesco is a very attractive employer for such young people. It also has so many stores in so many towns that it appeals very much to university students because it allows them to work at a store in their home towns when not at uni and in their uni towns when they are.

For these reasons Tesco remains an attractive employer for young people, but staff turnover remains just as high amongst these people simply because after graduating most of them have hopes and plans to go on to bigger and better things. None of them plan to work in retail for the rest of their lives.

Says the prat whose bible is the Daily Mail. lol.

Still at least you made me laugh. 

Shouldn't you be calling it the "Daily Wail" to impress your mentally ill friends?

You missed an option Benn. They can go bankrupt, shut down, cease trading as have so many pubs, restaurants etc. 

Tesco focuses on younger lower paid workers because the jobs are unskilled, so turnover is not really a problem.  these are also the jobs it is easiest to replace with technology. We have a number of students doing unskilled work, but we pay them more than the minimum wage because if you don't you only get people who don't work at all, steal from you, don't turn up for shifts etc.
The hospitality industry I am in is one of the few places left where replacing humans with computers is difficult, but even we are looking at it all the time as the economy dives and sales fall. 

I would respectfully ask you to consider the sales side of business, when looking at the employment side. The idea that business can always find the money by some trickery is just not true. 

I understand the sales side. Which is precisely why I think there is little scope for Tesco to pass on increased costs to existing customers without losing them. And there is an obvious intent to reduce over time the number of manned tills to replace them with self service options, where in my store 8 such tills are overseen by only two staff. However, they cannot go any faster or further with such developments than customers will sustain. Because large numbers of particularly older customers refuse to use them, and in places where too few manned tills remain, they have lost more money from customers going elsewhere than they have saved on staffing, not to mention the fact that such tills are a shoplifters' paradise. If my store got rid of all it's manned tills, what would happen is that a large chunk of its customers would go elsewhere. In the final analysis such automated self service options can only be carried as far as customers are willing to accept. Some, particularly younger people or those with small shops are happy enough to use them, but just as many, particularly those with big loads, tend not to be. There is a scan as you shop option that relies utterly on customer honesty - what could possibly go wrong, lol - but because so much was being lost this way by customers not scanning everything, we have had to institute such frequent random scans that it is both seriously hindering manpower savings and deterring customers from using the system because they are finding that it often takes longer than doing it the old fashioned way.

So full automation is unlikely to happen soon. It is not the golden bullet those not working in the retail sector assume it is. I anticipate over the next few years a gradual increase in the number of self service tills and reduction in the number of manned tills. But fully automated for most stores is at least a couple of decades away even if viable at all because there are still too many customers who won't wear it. Any store going too far risks losing too many customers to rivals. As Tesco itself has learned in some cases. Earlier this year it halted it's rollout of self service options because of this so they could rethink, and now the plan is to expand their use more slowly and gradually. For instance my store recently increased self service tills from 6 to 8 whilst removing just one of the manned checkouts. There is an obvious push to try and persuade more customers to use self service, but there are still many who blatantly refuse and would rather queue for as long as it takes. I doubt it will go any further in my store until this balance shifts further in favour of the self service option in regards to customer preferences.

Interesting. I'm slightly different to Squeezed in that I work for local government but for a private outsourcer. To be honest it's swings and roundabouts. Yes, there are penalty clauses in the contracts. Some are quite severe. The problem is that private companies just can't make any profit out of it, as there's no money there. Where they don't make any money they let the contracts expire.

On the other hand local authorities can't afford the contracts, so they are insourcing again and taking things back in house.

The public sector doesn't have the money for the investment needed to improve things, the private sector won't because there's no profit.

Of course the staff TUPE over from one to the other. They're the same staff, just with a different payslip. They dont behave any differently, as demonstrated by Squeezed comments earlier. Hence why I took real offence at your comments about public sector workers. I'm not sure where you got your ideas from, it must have been somewhere, but they were ignorant.