Retailers have called for a period of consolidation in the wake of the latest increase in national minimum wage (NMW).

The NMW for adults over the age of 22 increases by 30p an hour to £5.35 on October 1, while 18- to 21-year-olds must now be paid at least £4.45 an hour. The increase follows 20p and 15p rises respectively in 2005. Workers aged 16 and 17 will also benefit from a 30p hourly rate increase to £3.30.
Retailers warned of tough times ahead if the yearly hikes continue. "I think the constant rises are becoming a great concern for many independent retailers," said retailer Ramesh Shingadia, who runs a Londis store in Southwater, West Sussex.

"Staff wages are one of our biggest overheads and the increases are adding to the pressures we are already under. If the government decides on another increase, we'll have to cut back on staffing levels. There now needs to be a period of consolidation."

Robert Byford from Byford's Food Hall in Leigh-on-Sea, Essex, added: "We've known about the rise for quite a while and although I generally pay above the minimum wage already, there's always a knock-on effect. I'm not in favour of a national minimum wage as the cost of living differs across the country. And, like business rates and statutory sick pay, it's rising well above the rate of inflation."

Business groups have warned that age discrimination laws, which also come into force this month, could bring the NMW system into question. The British Chamber of Commerce said paying some workers more than their younger colleagues could be considered discriminatory. The government said the NMW's varying rates were permitted by law.

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