Yesterday’s 5.2 per cent increase in the minimum wage has caused two major retail bodies to react strongly against the Fair Work Commission’s decision.

Australian Retailers Association’s chief Paul Zahra fears the changes will become a tipping point.

“Whilst the ARA supported a fair and balanced increase to the minimum wage, we fear the scale of this increase could tip some businesses over the edge,” he said.

“Acute supply chain issues, staff shortages and the rising cost of energy, fuel and materials are creating unprecedented financial pressure.”

Dominique Lamb, National Retail Association CEO, was more blunt, calling the decision “completely out of touch.”

“The simple fact is that when businesses don’t have enough money to cover their expenses, they need to cut costs. There is no doubt that those cuts will lead to job losses in retail and no doubt in other areas of the economy as well.”