Proactive Investors - J Sainsbury (OTC:JSAIY) PLC said it is raising the hourly wage for 127,000 employees to £11 from February to support them as they face rising living costs.
In addition, the supermarket chain will extend free food during shifts for store and depot staff by another six months.
Sainsbury’s and Argos workers’ pay will increase from £10.25 to £11.00 per hour and from £11.30 to £11.95 per hour in London. The company said the rise represents a 10% increase over the last year.
The pay rise will cost Sainsbury’s £185mln and is on top of the £20mln rise agreed in October last year.
Soaring inflation and record energy costs have forced households to tighten their purse strings significantly and many are struggling to pay bills.
Supermarket food prices rose by 14.4% year-on-year in December, according to a survey released by market researcher Kantar yesterday, although this represented a drop from 14.6% in November and 14.7% in October, in a signal that food inflation is finally starting to slow.
Simon Roberts, chief executive of Sainsbury’s, said: “We are acutely aware of how tough things are for millions of households this winter and we know that particularly after Christmas, budgets will be tighter than ever.
“As well as doing all we can to keep prices low for customers, it’s our job to support our colleagues as they face rising costs. That’s why we are bringing forward the increase and committing a total of £205mln to increase pay to at least £11 per hour this year.”
“This is a massive investment that reflects the real challenges our people are facing right now. I’m really pleased that the progress we are making against our strategy means that we can continue to prioritise investing in colleagues to reward them for the fantastic service they deliver every day.”
Dave Gill, national officer of the Usdaw trade union, added: “We continue to work closely with Sainsbury’s on pay and these successive substantial increases make a significant difference to our members. With the cost of living continually rising, we have kept open our dialogue with Sainsbury’s and we are pleased the business has responded so positively.
“The scale of the financial challenges facing all workers is immense and there still needs to be significant interventions from government. Even under their plan, energy prices will have still doubled in six months and look set to go higher. Along with other prices sky-rocketing the cost of living is simply unaffordable for far too many workers.”
Discount grocer Aldi, which is now the joint-fourth largest supermarket chain in Britain, pays its workers at least £11 per hour, with staff at stores located within the M25 motorway earning £12.45.
Its rival Lidl pays £10.90 outside of London and £11.95 inside the M25, while Asda pays its staff £10.10 outside London and £11.27 within the capital.
From April 2023, the hourly minimum rate for employees over 23 years goes up to £10.42 per hour.