Retailers have criticised the government's decision to increase the National Minimum Wage (NMW) by 1.2%, saying that it will be an extra strain on their businesses. The increase, which comes into effect on October 1, 2009, takes the rate from £5.73 to £5.80 per hour.

Doreen Smith of Byford's Food Hall in Leigh-on-Sea, Essex, said that the increase placed more pressure on retailers. "There wasn't enough restraint shown by the government with this increase and really there shouldn't have been one this year considering the state of the economy," she said.

Doreen added that she would have to find ways to cover the increase. "We may have to reduce hours among the staff, or even start closing a little earlier to save on costs."

Scottish Grocers' Federation chief executive John Drummond said that while it was a more realistic rise compared with recent years, the NMW increase could lead to a loss of jobs in the sector.

He said: "For many small retailers, 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 and to consider a reduction in hours and, in the worst case scenarios, redundancies."

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

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

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