Unlike their larger counterparts who reacted angrily to this week’s minimum wage rises, independent retailers are already willingly paying a premium to attract and retain staff, new research reveals.

According to the British Shops and Stores Association (bssa), independent store owners have recognised that while they often cannot compete on price with supermarket chains, they are willing to offer attractive salaries and other benefits to appeal to the very best employees.

As well as competitive pay levels, the study revealed 50 per cent of small businesses were offering 28 days annual leave to workers even though the statutory requirement for doing so does not come into effect until April 2009.

The findings are in contrast to this week’s strongly worded statement from the British Retail Consortium, which represents large stores, saying annual increases to minimum wage levels are leading to “distorting pay structures…eroding differentials and weakening rewards and incentives for improving skills”.

John Dean, bssa chief executive, said although his organisation agrees that the structure and formula used to calculate the minimum wage is unsustainable in the long term, small independents’ approach to statutory pay levels differ significantly from the larger multiples.

“The positive pay gap reported by bssa members indicates the overriding importance they attach to both recruiting and retaining the quality staff they need to differentiate themselves from high street multiples,” he added.

“With multiples constantly focusing on cost-cutting, both in-store and through pressure on the supply chain, independents have realised that they can’t always compete on price but that they can win on service and that’s clearly what they are committed to delivering.”