Retailers have condemned government plans to raise the minimum wage 75p an hour over the next 20 months as economically devastating.
Secretary of state for trade and industry Patricia Hewitt announced the plans to put the wage up for adults to £4.50 in October and provisionally to £4.85 in October 2004, following a recommendation by the Low Pay Commission.
Eddie Thompson, chief executive of Scottish c-store chain Morning Noon & Night, said October's rise would cost MNN £200,000 a year, and another £200,000 in 2004.
He said: "This massive uplift will have a dramatic effect on the independent sector, draining the resources of small stores."
British Retail Consortium director-general Bill Moyes said the government was risking the future of the UK economy.
"The Low Pay Commission is setting a target and creating an expectation that may prove unaffordable in the future, especially for small and medium-sized retailers."
ACS chief executive David Rae said: "It is disappointing that the announcement of increases in the minimum wage has been timed for the government's political convenience.
"The level of the rises 7.1% in October 2003 and a 7.8% to October 2004 is out of step with a 1.8% rate of inflation, an annual 3.7% average pay increase, and public sector pay awards around 3%.
"This rise to wage costs, the largest cost area for a c-store will lead to price increases, staff hours being cut, and in some cases store closures."
Youth rates are to go up to £3.80 in October 2003, and, provisionally, to £4.10 in October 2004 from £3.60 now.