Shopfloor staff at Sainsbury’s to receive 4% pay rise

<p>Hourly pay for workers over 18 is to go up from £7.08 to £7.36 an hour.</p>

Sainsbury's has announced that it will be giving a four per cent pay rise to 137,000 shopfloor staff.

The pay increase is the biggest in a decade and has been agreed on the back of the supermarket chain receiving pressure from low pay campaigners.

In a statement, the supermarket said its standard rate of pay for store workers would go up from £7.08 to £7.36 per hour, starting next week. This rate remains below the level of living wage that campaigners have been demanding, however it's more than the £7.20 living wage that Chancellor George Osborne has set for over-25s, and which comes into force in April 2016.

Some analysts have warned that supermarkets may choose to stop hiring over-25s once the new national living wage comes into effect in order to save money.

Sainsbury's noted that it would not differentiate between those over or under 25 years of age in its workforce. This means that 40,000 younger store staff will also receive the new wage. The supermarket added that the only exception to this would be for the 1,500 to 2,000 staff under 18 who receive a training wage during their first six months with the company.

Shopfloor staff are the only ones to benefit from the announced pay rise. According to the Guardian, Sainsbury's declined to comment on its plans for the 24,000 non-store staff and store managers. 

"Brilliant"

Gillian Owen from Citizens UK, one of the groups that has been pressuring major retailers to pay the independently evaluated living wage of £7.85 across the UK and £9.15 in London, called the news a "brilliant step".

She added: "We welcome it and encourage Sainsbury's to continue to look at how it could implement a living wage as and when possible in its business. We know it is leading in its sector and particularly welcome the fact Sainsbury's is including all staff in this wage rise, regardless of age."

On Thursday (August 27th), Sainsbury's shares were up around 1.57 per cent to 239.80p.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (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.

For further details see our full non-independent research disclaimer and quarterly summary.