Sainsbury’s is to increase staff pay after delivering its ‘biggest ever Christmas’, marked by a rise in market share and a surge in volume growth.

Chief executive Simon Roberts said that Sainsbury’s would raise pay for its hourly-paid colleagues by 5% in the year ahead, becoming the “best paying UK grocer” from March.

The supermarket chain is to split the pay hike into two separate increases to allow Sainsbury’s to navigate a challenging cost environment, while ensuring it continues to support staff.

Colleagues across both Sainsbury’s and Argos will move to £12.45 per hour in March, or £13.70 for those in London, with a further increase to £12.60 per hour in August, or £13.85.

Currently, Aldi and Lidl lead the grocers with the best supermarket pay of £12.40 an hour, or £13.65 within the M25, compared to Sainsbury’s which pays staff £12, or £13.15.

It comes as the grocer’s overall sales rose by 3.7% year on year in the 16 weeks to 4 January, while sales increased by 3.8% during the six-week Christmas period.

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This performance was driven by momentum in its grocery division, with sales up 4.1% in the third quarter of 2024. Volume sales were also boosted over the festive period, increasing 6% higher than in 2023.

Individual successes include Sainsbury’s party food range, with sales up 40% and that more than 200 bottles of fizz were sold every minute in the UK, ahead of Christmas.

Roberts described it as the grocer’s “biggest ever Christmas”, adding that is has “won grocery market share for the fifth consecutive Christmas, with more customers choosing Sainsbury’s for their big shop”.

“Driven by our leading combination of quality, value and service, we have achieved seven consecutive quarters of volume performance ahead of the market and further accelerated our two-year volume growth.”

Looking ahead for 2025, Sainsbury’s retail underlying operating profit is in line with consensus, currently at the midpoint of its £1.01bn to £1.06bn guidance range, resulting in growth of around 7%.

Earlier this week, Kantar data showed Sainsbury’s delivered its best December performance since 2019, outpacing market and achieving 16% market share, its highest figure in four years.