Budget supermarket chain Lidl has announced that it will start paying UK employees the minimum wage as recommended by the Living Wage Foundation. This will make it the first UK supermarket to take the step.
From October, Lidl UK employees will earn a minimum of £8.20 an hour in England Scotland and Wales. In London, the minimum wage paid will be £9.35.
The rate recommended by the Living Wage Foundation is different from the National Living Wage, which was set out in the chancellor's summer budget. The foundation says it plans to update its recommendations in November and Lidl says it will adjust its minimum wage accordingly.
Currently, Lidl employees earn a minimum of £7.30 an hour (£8.03 an hour inside London). The Living Wage Foundation's current minimum hourly rate is £7.85 and £9.15 for London. In comparison, the National Living Wage is set to be £7.20 an hour from April 2016 for people aged over 25.
According to Lidl, its new pay rate will lead to an average wage increase of £1,200 a year. The supermarket added that more than half (53 per cent) of its 17,000-strong UK workforce would benefit from the rise.
Best paid supermarket employees
Ronny Gottschlich, chief executive of Lidl UK, said that the wage increase would result in Lidl employees being "amongst the best paid in the supermarket sector".
The director of the Living Wage Foundation, Rhys Moore told the BBC that he was "thrilled" with the announcement.
"We've been working with and trying to persuade the retail sector to commit to pay the living wage rates rather than National Minimum Wage," he said, adding that none of the big four supermarkets (Tesco, Asda, Sainsbury's and Morrisons) currently pay the living wage rates. He said he believes the British Retail Consortium is "behind the curve" on wages and praised Lidl's decision.
"Lidl is demonstrating this commitment to staff, and customers want to know that they're shopping in places which treat their staff well," he explained.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.