Minimum wage research published by the government has revealed that supermarkets are forcing rivals to improve staff wages or face staffing problems.

A new impact assessment published by the Department for Business, Energy & Industrial Strategy (DBEIS) featured anonymous evidence from a major supermarket and other employers throughout the UK.

The supermarket said it and other multiples were paying varying wages throughout the country partly based on how much local competitors were paying.

Other employers in the report including those from the food and care sectors said supermarkets, which nearly all pay above the minimum levels as standard were poaching their staff and forcing them to offer more competitive salaries.

Asked how supermarkets were offering higher wages, the reports’ supermarket source said that there was widespread restrictions on paid breaks and shift premiums.

Responding to the findings, David Charman from Spar Parkfoot in Kent said “We’ve always paid the proper living wage set by the Living Wage Foundation, so it’s already above what the government calls a living wage. It means supermarket pressure hasn’t ever been a factor for us and that definitely has an impact on staff retention.”

Jacqui Dales from Spar London Road in Boston said: “When the living wage came in I found that I lost some good staff to supermarkets so I've introduced a more tiered pay structure and introduced performance related bonuses." 

"This has allowed me to retain decent people. We've just had a Lidl open near us, paying £8.40 an hour to sales assistants which is tough to compete with. They do want 100% flexibility in working hours for that though which doesn't suit a lot of my team.”

The minimum wage is set to increase in April. Wages for workers aged 25 and over will increase 33p per hour to £7.83, 33p to £7.38 for workers aged 21-24, 30p to £5.90 for workers aged 18-20 and by 15p for those aged 16-17.