According to The Grocer's latest exclusive reader panel survey, four in ten retailers will have to dismiss staff because of the rise in minimum wage from £5.05 to £5.35 from October. One in five said this could threaten the future of their business.
One shopkeeper in South Yorkshire complained that he could not afford to pay himself or his wife the new minimum wage - only the part-time assistant employed to give his family a break. "We cannot generate the income in our shop to cover this increase," he said. "The minimum wage is a disgrace because it works for the big retailers who can afford to pay it, but it penalises us."
Others said the rise would mean they would have to work longer hours to cover jobs that they could not pay extra employees to do. "I already do a 14-hour day seven days a week so I certainly don't want to work any longer," said one.
All shopkeepers quizzed thought the situation would get worse, believing that a further rise was inevitable and that it would probably become an annual event. Most said that staff wages were a major part of their bills and that more increases would hurt a greater number of independent retailers.
"It's not just the wage going up but all the associated costs of employing people," said one retailer in Scotland.
However some felt the latest rise in the minimum wage was not a major issue as they already paid higher rates of pay. "Finding staff that you can trust is a tough thing to do and it is worth paying them more to keep them," said one retailer in London.
This sentiment was echoed by a retailer in the Midlands who said she paid more than the minimum and put wages up every April. "
I think this is morally right and it makes my staff feel valued," she said.
The wage rate increase will apply to all workers aged 22 and over. Minimum pay for 18 to 21-year-olds is also scheduled to rise from £4.25 to £4.45 per hour, while 16 to 17-year-olds' lowest rate of pay will rise from £3.00 an hour to £3.30.
The BRC has said retailers would face £1.1bn in extra costs if the rises took place as planned. It called for a review of the wage hike process at the end of last year and said 11% of retailers it surveyed would consider job cuts if the increase went through. A similar study by Spar found 95% of its retailers had experienced reduced profit because of previous increases.