Amid a tight labour market and pressure from unions to up wages amid the cost of living crisis, several more retailers have announced pay rises for their staff.
Tesco revealed yesterday that the hourly pay rate for its store employees will increase 9.1% to £12.02, which is above the Real Living Wage and represents a record £300m investment by the retailer.
Tesco’s UK CEO, Matthew Barnes, said: “This represents another significant investment in our colleagues, building on the last two years of investment. We recognise the amazing work our colleagues do every day in serving our customers, and we’re really proud to offer such competitive rates of pay alongside a great range of exclusive colleague benefits.”
Meanwhile, the John Lewis Partnership (JLP) is raising the rates of staff pay across its department stores and Waitrose chain by 10% to minimum of £11.55 an hour at a cost of £116m. The Co-op has also upped its pay by 10.1% to £12. Both retailers offer higher rates for staff working in London.
In recent weeks, Sainsbury’s, Asda, Marks & Spencer, Aldi, and Lidl have all announced pay rises for 2024.
The Bank of England is keeping a close eye on wage settlements as it assesses the direction of interest rates. It fears rapid wage growth could add more inflationary pressure across the economy.
NAM Implications:
- The key is the need for retailers to pay more to attract and retain good staff.
- And if most retailers raise rates, the move becomes less effective.
- (apart from increasing pressures on debt-ridden players)
- Hopefully, £12/hour will be a 2024 settling point…