"Recent data from the Australian Bureau of Statistics show that the sector suffered a 0.5 per cent fall during the traditionally busy month of December and the figures for January 2018 again highlighted poor sales growth.

"During environments such as these, it is vital that retail businesses do not have conditions imposed on them that make it more difficult to operate."

The Retail Association says it is "highly likely" that a recent decision to grant an overtime entitlement to casual employees had resulted in "inefficiencies in the allocation of labour" that had led to a "hidden increase in the average wage".

The organisation did note however that "a very small minority of National Retail Association members have expressed the view that an increase in wages will positively affect productivity".

The union movement - which has called for a 7.2 per cent increase of $50 a week - called the Retail Association's submission "completely out of touch".

“Retail workers are already struggling with historically low wage growth, cuts to their penalty rates and insecure work. They urgently need a pay rise, not a pay cut," said Shop, Distributive and Allied Employees Association national secretary Gerard Dwyer. “If Australian retailers want to improve business, they should be calling for wages increases, not cuts.”

Another peak group for the $310 billion retail industry, the Australian Retailers Association, recommended a 1.9 per cent increase - a $13.20 per week rise that would take the national minimum wage to $708.10.

It says such an increase would be "realistic and reasonable", taking into account the slowly-improving economy, current and imminent wage bill increases for industries undergoing structural adjustment, and underemployment. The commission's recent wage decisions had been "generous", it said.

"We ask the panel to consider high national minimum wage increases over recent years as
compensation that the economy, employment levels and businesses can no longer afford."

The commission last year awarded a 3.3 per cent increase of $22. The ACTU had asked for a $45-a-week increase, while business groups had asked for between $8 and $10. The Retail Association asked for a 1.2 per cent increase for 2016/17.

The Australian Chamber of Commerce and Industry has also recommended an increase "not exceeding 1.9 per cent" this year.

"This is higher than the increase we recommended last year, acknowledging that key
economic indicators, when national aggregate data is considered, suggest signs of
improvement in the economy and labour market relative to last year," the organisation said in its submission.

"However we are also cognisant that these improvements in the economy and labour market are not consistent across all regions, states, territories and industries."

The ACTU's record claim - which would increase the full-time minimum wage to $744.90 a week - drew the ire of Australian Industry Group chief executive Innes Willox, who said it had been "plucked out of the air".

"The claim is nearly four times the current rate of inflation. If accepted by the Fair Work Commission, the claim would destroy jobs and harm low-paid workers," he said.

About 200,000 Australians are paid the minimum wage directly but it affects pay rates for a further 2 million award-reliant workers. The Fair Work Commission will deliver its decision by June.