Employing staff could become an unrealistic cost for small independent shops under Labour plans to reform the national minimum wage (NMW).

Retailers have spoken out against proposals made by opposition leader Ed Miliband, which would link the minimum wage to average earnings.

[pull_quote_center]This could lead to business closures, hours being cut and jobs being lost[/pull_quote_center]

They believe this would raise minimum wage levels further than small retailers can cope with, jeopardising their business models. Labour’s announcement sparked a similar outcry to Chancellor George Osborne’s proposed inflation of the NMW by 50p in January.

NFRN chief executive Paul Baxter said: “The NFRN is sympathetic to calls to increase the national minimum wage, but the impacts that such changes would have on micro businesses should be fully considered. Changes could lead to business closures, hours being cut and jobs being lost.”

This view is supported by statistics from the 2013 ACS Minimum Wage Survey, which showed that as things currently stand 87% of retailers have reduced staff hours within their businesses as a result of increases in employment costs. And 75% have delayed expansion and investment plans.

ACS chief executive James Lowman said: “The success of the national minimum wage over the last 15 years is based on ensuring politics is removed from how rates are set. It is vital it doesn’t change.”

Manchester retailer Peter Jack of Swinton Metro said: “People do deserve a good standard of living but it can’t be at the sacrifice of those employing them. It’s not fair to ask business owners to work harder than their staff and without receiving the same benefits or pay.”

However, Desmond Barr of Sinclair Barr Newsagents in Paisley, Scotland, doesn’t think reforms to the NMW are a problem.

He said: “I pay all of my staff more than the minimum wage so I can hold on to good and loyal workers. Higher minimum wages aren’t behind the strain on the industry, that’s down to the publishers slashing newspaper margins.”