The organisation has said increasing salaries for lower paid staff will not have the desired effect, instead resulting in higher consumer prices or worker hours being cut.

“If we can’t control the price of things such as accommodation for workers, then raising their wages will just keep driving those up,” said Neil McDonnell, the chief executive of Isme.

Earlier this month the Low Pay Commission recommended the national minimum wage (NMW) rise from €11.30 per hour to €12.70 per hour next year, a 12.4pc rise.

The measure still has to be approved by Cabinet, but recommendations from the Low Pay Commission normally receive government support.

In a letter sent to the Taoiseach, Isme chairman Marc O’Dwyer urged the Government to reject the recommendation.

“The retail members of Isme estimate the 12.4pc wage impact will add between 1pc and 2.5pc to grocery bills, depending on store size,” he said.

“While very few Isme members pay staff at the NMW, the rate serves as an important benchmark for most incomes up to approximately €30,000,” he said.

Mr O’Dwyer said the rise comes “on top of” several other payroll measures set to be introduced, including statutory sick leave and statutory domestic violence leave.

Mr McDonnell said the focus should be on controlling costs.

“We’re not saying that domestic violence leave will drive companies over the edge,” he said.

“What’s happening is we’re getting an accumulation of these things in the services sector without any discussion on costs.”

Isme said the expected increased cost for groceries was due to how much staff wages factor into prices.

“In discounters like Lidl and Aldi, the cost of labour is about 8pc. In smaller retail stores, it’s around 20pc,” he said.

“So if you take the planned 12.4pc increase and apply it to both, all other things being equal, you would expect the discounters to raise their prices by 1pc and the small guys by about 2.5pc.

“A worker doesn’t necessarily get 12.4pc extra gross pay. They might see their hours go from 39 per week to 35, so they might only be a euro or two better off.

“That’s if businesses don’t bear it. If they do bear it, you will get price inflation. So you can take your pick on which vice is the least damaging.”