The Association of Convenience Stores (ACS) has warned that increases in the National Minimum Wage rate for people aged 24 and under will reduce investment and job creation by local shops.

The government has accepted and published recommendations by the Low Pay Commission for the following minimum hourly wage rates to apply from October 2016:

• £6.95 for 21-24 year olds, an increase of 3.7%;

• £5.55 for 18-20 year olds, an increase of 4.7%;

• £4.00 for 16-17 year olds, an increase of 3.4%.

ACS chief executive James Lowman said: “These additional costs, at a time of low inflation and when food prices are actually going down, will place further pressure on local shop owners. We know that when wage costs rise retailers respond by cutting investment, reducing staff hours and squeezing pay differentials, all of which affect a business’s long-term competitiveness and productivity.

“While we are concerned about the implications of this announcement, we respect the process the Low Pay Commission has gone through, and its efforts to balance out the needs of businesses and staff in all sectors of the economy. This process has resulted in different recommendations for different groups.

“This is in stark contrast to the highly politicised announcement of a National Living Wage by the Chancellor at his July 2015 budget, after no consultation or detailed analysis of the impact on businesses. It is irresponsible to have stripped the independent Low Pay Commission of its powers to recommend rates for all age groups, and the Chancellor should announce in this week’s budget that he will give this responsibility back to the Commission.”