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Marks and Spencer has become the latest UK retailer to increase wages as large supermarket groups continue to battle to retain workers.
The FTSE 100 company said hourly pay for 40,000 employees will from April go up from £10.90 to £12, a 10.1 per cent rise on last year. For those working in London, the rate will increase by more than £1 to £13.15.
The pay bump means the majority of its workers will be paid the voluntary Real Living Wage, which is higher than the compulsory National Living Wage in the UK. The latter is set to rise to £11.44 an hour in April.
Andrew Speke, at the High Pay Centre think-tank, said the growth in supermarket pay was largely a reflection of the challenges companies face in a tight labour market as it appeared to outpace average wage growth.
All the major supermarkets have been increasing pay amid a tight labour market and the cost of living crunch over the past 18 months.
Sainsbury’s announced in January it would increase its hourly rate from £11 to £12 for 120,000 employees from March, a move that will cost it £200mn.
It mirrors similar rises from German competitors Aldi and Lidl. Last month Lidl matched Aldi’s pay rise for store and warehouse workers. From March, Lidl’s national rate is set to rise from £11.40 to £12, while its rate within the M25 will go up from £12.85 to £13.55. Aldi announced identical measures in December, which kicked in this month.
“M&S’s decision to increase minimum pay levels in line with numerous other supermarkets reflects this reality,” Speke said. “While one would hope these companies are also taking into consideration the challenges low-paid workers face with the rising cost of living, the impetus for these pay increases is likely out of necessity due to market conditions rather than altruism.”
The annual pace of growth in average weekly earnings, including bonuses, slowed to 5.8 per cent in the three months to December in the UK, according to official data this month.
M&S chief executive Stuart Machin on Tuesday said the changes, totalling £89mn, were about being “the most trusted employer” as the company announced a host of other benefits relating to maternity, paternity and adoption policies.
The announcement comes after more than 9,200 M&S employees were told last month they were set to receive bumper share payouts, thanks to a share save scheme, as the retailer’s turnaround continued. The stock has risen 52 per cent in the past year.
Source: Economy - ft.com
