Two thirds of retailers are setting starting salaries significantly above the National Minimum Wage (NMW).

The starting salary for the year to November 1 is a big jump on last year, when only a third of retailers broke the NMW level for their starter pay rates, according to Incomes Data Services.

Grocery retailers, particularly big supermarkets, offer the most generous starter wages, with Tesco paying the highest adult starter rate set at£5.95 an hour in 2007. Iceland gave retail assistants a 5.6 per cent pay rise in October increasing the minimum pay to 13p above the NMW.

Shopworkers’ union Usdaw national officer Joanne McGuinness said the big retailers are keen to be competitive in all areas, including lower staff turnover. “Retailers are seeing the need to offer better overall packages, not just hourly rates to keep hold of staff for the long term,” she said.

She added: “The bigger companies, which can afford it, should be paying above the minimum rate and remember it is a minimum, not a glass ceiling.” Retailers that pay the NMW include Homebase, Somerfield and Argos.

Fashion retailers come out on top as regards rates of pay given to staff after six to 12 months of service. For instance, Marks & Spencer pays a starter rate of£5.75, which goes up to£6.02 for longer-term employees.

Incomes Data Services researcher of pay reports Lois Wiggins said the fact that most retailers are paying well above the NMW is an encouraging sign. “However, the NMW did not rise as sharply as previous years, only up 3.2 per cent compared with 5.9 per cent in 2006. This has made it easier for many to elevate themselves above the NMW than before.”

Next year, it is expected that the NMW, which usually goes up in line with average earnings, will rise 4 per cent to£5.75 an hour, according to Wiggins.