Sainsbury’s is to raise wages by 4 per cent this weekend in a move that puts it ahead of Tesco in the pay league table.
The new rate of £7.36 an hour will apply to 85 per cent of the group’s 161,000 staff . Although it is 3p lower than Tesco’s rate, Britain’s biggest supermarket group does not offer paid breaks, which allows Sainsbury’s to claim a higher overall rate.
The move comes ahead of the introduction of the national living wage for workers aged over 25, starting at £7.20, from April next year. Retail, which is Britain’s largest private employer with 3 million workers, will be one of the main sectors affected by the summer budget ruling.
Sainsbury’s will go further than the living wage by extending the rate to those under 25.
Asda pays shopfloor staff £6.89 outside London, which will rise to £7 an hour. Wm Morrison, Britain’s fourth largest grocer, pays between £6.83 and £7.79, according to the regional cost of living.
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Sainsbury’s said its pay rise meant that 40,000 staff would be above the living wage threshold.
Big supermarkets are grappling with a renewed onslaught from the discounters, Aldi and Lidl, while customers have moved online for many of the non-food items that supermarkets began offering in the 1990s and 2000s.
Tesco said last month that it would not increase its overall pay but is still hammering out deals with unions.
Joanne McGuinness, Usdaw’s national officer, said that a significant increase in pay was long overdue: “We meet with the company every year and make a strong case for decent rewards for staff, particularly around pay, and the new rate of £7.36 is a step in that direction.”
Waitrose is among the lowest payers, according to a survey by The Grocer. While Waitrose’s basic £6.73 an hour for a new starter is below Aldi, Lidl and Iceland, staff get a share of the John Lewis Partnership’s profit as employee-owners, or partners. Last year the bonus was worth 15 per cent of salary. The salary also increases to £6.92 an hour following a three-month review and can go as high as £8.36, Waitrose said, adding that the average pay was £7.45 an hour.
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Sainsbury’s pay rise does not apply to managers, whose settlements are dealt with separately, or under-18s being paid an introductory training rate for their first six months. Nor will it apply to those employed in support centres and depots.
In June, Sainsbury’s posted its sixth successive quarter of sliding like-for-like sales — down 2.1 per cent. However, industry data suggested that it may have turned a corner.
Figures from Kantar Worldpanel showed it was alone among the Big Four grocers to grow total sales in the 12 weeks to August 16, with a 0.1 per cent rise.