Pay rates have been a contentious issue for retailers over the last year and with the cost-of-living crisis continuing to squeeze household incomes, supermarkets have been hiking up their hourly pay rates to effectively counter surging inflation.
Tesco made its biggest ever investment in employee pay earlier this week, investing £230m as it boosts its hourly rate of pay to more than £11 per hour.
The pay increase is the latest boost in employment benefits as supermarkets continue to compete for staff, with Sainsbury’s and Asda both increasing pay to above £11 per hour in the past few weeks, while Aldi has raised pay for its instore workers three times over the past 12 months.
Retailers have also found themselves battling heavy criticism over pay that did not rise in line with inflation, with some colleagues taking industrial action over pay, working closely with unions like Usdaw.
We take a look at why supermarket pay rates have risen over the past year and who’s top of the league so far for 2023.
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1. Asda – current hourly pay rate of £11.11
In February 2022, Asda issued a below-inflation pay increase to 123,000 of its retail workers, requiring them to accept pay well below the industry average – meaning from April 2022, store workers were earning £9.66 per hour, although London colleagues received £10.83.
After being hit with significant backlash from the GMB Union, Asda increased pay for its shop floor workers, to £10.10 by July 2022. The pay increase also saw staff receive an additional 60p on top of the National Living wage.
Asda was also accused of offering its male staff a larger pay rise than its female employees at the start of the year, however, it has shrunk this gap as female staff are reportedly taking more senior roles at the company.
Just this month, Asda invested a record £141m in giving a 10% pay increase to hourly-paid store colleagues, taking it from being at the bottom of the supermarket pay league to sitting comfortably in first place.
The big 4 grocer revealed that pay rates will be rising to £11 per hour from April 2023 and £11.11 per hour from July this year, in a move which will benefit more than 115,000 colleagues who work across its 633 stores.
It marks the third time Asda has increased hourly pay rates over the last year. The new rates of pay, which exceed the Government’s national living wage, were also agreed with trade union Usdaw.
2. Tesco – current hourly pay rate of £11.02
In April 2022, Tesco revealed its first new pay deal of the year, that saw its in-store and depot staff members increase hourly pay rates by 5.8%, from £9.55 to £10.10 from July 2022. It came as Tesco invested £50m as a bonus to its workers, following end of year financial results of over £2 billion. 290,000 shop staff saw a bonus worth 1.25% of their annual wages in May 2022.
It came as Tesco warned its full-year results would be “lower than expected” as profits plummet and ongoing inflationary pressures continued. However, the UK’s largest supermarket also continued to focus on investing in growth as it raises staff pay and announces price freezes across hundreds of product lines.
In October, salaried Tesco workers were forced to take a pay cut as the retailer looked to offer larger wage increases for lower-paid workers. Tesco then offered 280,000 workers advances on their pay in November, to help with the added financial pressures, providing workers with up to 25% of their pay and taking the basic hourly rate up to £10.30.
Tesco’s latest investment in employee pay was also its biggest ever, investing £230m as it boosts its hourly rate to more than £11 per hour – the third increase in the past 10 months – taking the retailer’s total investment in hourly pay increases over the last year to a record-breaking £450 million.
The new hourly rate now sits at £11.02 and represents a 7% rise in base pay, and will come into effect from 2 April 2023. The new deal was agreed with trade union Usdaw.
3. Sainsbury’s – current hourly pay rate of £11
In March 2022, Sainsbury’s announced it was increasing its basic hourly rate of pay for all Sainsbury’s employees from £9.50 to £10 an hour. Employees in inner London saw a pay rise from £10.10 to £11.05, and staff in outer London saw an increase from £9.75 to £10.50.
Two months later in May, the Big 4 grocers’ colleagues in outer London saw an increase in their base rate of pay from £10.50 per hour to £11.05. As a result, Sainsbury’s colleagues in outer London joined employees in inner London and the rest of the UK in being paid the relevant real living wage for their location.
It came as Sainsbury’s chief executive, Simon Roberts, received a pay packet worth £3.8m in 2021, approximately 183 times larger than that of the average Sainsbury’s worker – representing a like-for-like increase of 31% over the year. Sainsbury’s employees were awarded a pay increase of just 5.3% in the same period, well below the 9% level of inflation at the time.
In September, Sainsbury’s invested £25 million in a wide-ranging cost-of-living support package for colleagues to support them with rising household costs, including a pay rise and increased discounts. Sainsbury’s hourly pay increased from £10.00 to £10.25 and from £11.05 to £11.30 per hour in London, with 127,000 hourly paid colleagues benefiting in October 2022.
The big 4 grocer then kicked off the New Year by investing a total of £205 million to boost hourly pay for shop workers to £11 per hour across the UK. As a result, Sainsbury’s and Argos hourly retail colleague pay increased from £10.25 to £11.00 per hour and from £11.30 to £11.95 per hour in London – marking the fourth increase over the last year.
4. Aldi – current hourly pay rate of £11
Aldi announced a pay increase for around 26,000 store colleagues for the second time last year, which saw all hourly paid colleagues receive an increase of 40p an hour on their current hourly rate from September 2022. The German discounter maintains its position as the UK’s best-paying supermarket, which took Aldi’s minimum pay rates to £10.50 an hour nationally and £11.95 for those inside the M25.
Aldi then increased the hourly pay rate for thousands of employees working in its distribution centres across the UK by as much as 9%. Around 4,200 employees benefitted from the increase, taking Aldi’s investment in pay to around £50m in 2022.
Following this, Aldi UK became the first supermarket to pay its starting store assistants a minimum of £11 per hour nationally. Around 26,000 store colleagues will benefit from the increase, which saw starting store assistants within the M25 being paid £12.45 from 1 January 2023.
In January 2023, the discounter then increased wages for around 7,000 warehouse workers across the UK, where colleagues now receive a new minimum rate of £13.18 an hour – up from £11.48 this time last year.
Following two pay increases for hourly-paid warehouse colleagues in 2022, this rise means colleagues will be paid up to 20% more than January 2022, taking Aldi’s investment in pay over the last 12 months to over £100m.
Waitrose – current hourly pay rate of £10.70 (on average)
Depending on age, Waitrose store staff earn between £9.89 and £11.50 an hour – making an average hourly rate of around £10.70.
The upmarket retailer recently launched its new support scheme for staff and customers by investing £100 million to lower the prices of over 300 everyday products in a bid to help households save during the cost-of-living crisis. Almost a third of Waitrose’s lowest priced 900 product own-brand range, ‘Essential Waitrose’, will see price drops of 14% on average.
On top of that, full-time Waitrose Partners received a one-off cost of living payment of £500 alongside an increase in entry level pay which will benefit 70% of the retailers employees.
Morrisons – current hourly pay rate of £10.20
Morrisons announced in June last year that was raising hourly rates for its store and manufacturing staff to £10.20, a minimum 2% increase on their base rate.
The new deal means that since 2014, hourly pay rates for Morrisons’ store customer assistants has gone from £6.83 per hour to £10.20, an increase of more than 40%. The pay deal proposal also follows negotiations with the Usdaw.
For all stores in London, the big 4 grocer will pay a London location supplement of £0.85 per hour – taking the minimum rate of pay for store colleagues within M25 to £11.05.
Marks and Spencer – current hourly pay rate of £10.20
From April 2022, over 40,000 colleagues across the UK saw their base rate of pay increase by 50p an hour, rising to £10.00 (from £9.50), along with rates in London rising to £11.25 (from £10.75).
Later in October last year, M&S colleagues saw an hourly pay increase to £10.20, and a one-off payment of £250 to 4,500 of its salaried colleagues at pre-management level at its stores and support centres.
The retailer’s investment ensures its base rate of pay is ahead of both the national living wage and the real living wage across the UK and in London. In addition to its pay investment, M&S has enhanced its overall offer, which has been developed to reflect what matters most to employees, including base pay and health and wellbeing benefits as their key priorities.
Lidl – current minimum hourly pay rate of £10.10
In November 2021, Lidl announced the rates of pay for new shop floor workers would rise from £9.50 to £10.10 an hour outside London, and from £10.85 to £11.30 in the capital from March 2022.
The German discounter also revealed longer-serving staff would see their pay rates rise to £11.40 and £12.25 outside and inside London respectively, depending on length of service.
From 1 October 2022, Lidl increased its entry-level rates again – going from £10.10 to £10.90 per hour outside of London and £11.30 to £11.95 per hour within the M25. This move saw 23,500 of its colleagues earning up to £12.00 and £13.00 respectively and made it the UK’s highest paying supermarket for a period of time.
