Retail trade bodies have welcomed the government’s decision to increase the adult minimum wage from £5.73 to £5.80 per hour, an increase of 1.2%.

This is the lowest rise on record, and significantly lower than the 2008 increase  of 3.8% and the 2007 increase of 3.1%. The new minimum wage rate will come into effect on October 1, 2009.

Association of Convenience Stores (ACS) chief executive James Lowman said that although the ACS made the case for no minimum wage increase this year, it welcomed the restraint shown.

British Retail Consortium director general Stephen Robertson said that the 1.2% increase would benefit both retailers and employees. He said: “1.2% strikes a common-sense balance between helping low-paid workers and enabling retailers to maintain, and where possible, increase job opportunities.”

Scottish Grocers’ Federation chief executive John Drummond said that while it was a more realistic rise compared to recent years, it is still an increase in costs for small retailers who are already struggling.

Drummond added that this added expense could force retailers to make redundancies. He said: “This increase combined with the effect of the recession and its impact on customer footfall, has left them with no alternative but to review staffing levels, consider a reduction in hours and in the worst case scenario, redundancies.”

The Youth Development Rate will also increase from £4.77 to £4.83 per hour and the minimum wage for 16-17 year olds will increase from £3.53 to £3.57 per hour.