Why are shop floor staff struggling to pay bills while retailers make huge profits?

During a GMB union meeting last week, I heard from Tina, who works for a well-known retailer. She told me: “I’m worried I won’t be able to put the Christmas lights up for the grandkids this year because I can’t afford the electricity.”

It comes at a time of soaring supermarket sales. Aldi reported its ‘best ever’ Christmas for 2021 and Tesco outperformed its major rivals, achieving its highest grocery market share in nearly four years. In 2021 alone, grocery sales hit £11.7bn.

The comparison between what retailers see as their ‘golden quarter’, which typically attracts bumper consumer spend and boosts profits, and the day-to-day reality for retail workers who ensure the success of that peak period is stark.

The Covid crisis, cost of living crush and ever more successful strike action have seen retail workers begin to question whether they should accept low pay on the shop floor.

They kept the nation fed through a pandemic, working while others remained safely at home. Their employers, able to stay open while other businesses closed, continued to see profits while paying significant dividends and awarding director pay increases.

Tesco paid nearly £6bn in dividends to shareholders in 2020-21, marking an increase of 798% in one year. Similarly, Asda saw operating profits rise 42% to £693.1m in its first year under new ownership, and Sainsbury’s made pre-tax profit of £854m in 2021-22, resulting in shareholder payouts of 13.1p per share.

But for the lowest-paid workers that create the profit, the picture is much less rosy. Base rates of pay for shop floor staff sit stubbornly at little more than the minimum wage.

The basic hourly rate of the new big four – Aldi, Tesco, Sainsbury’s and Asda – is £10.50, £10.30, £10.20 and £10.10 per hour respectively. The Living Wage Foundation calculates the current ‘real’ living wage outside London is £10.90 per hour.

Much of this work is done by working class women, who make up the majority of shop floor workers and are more likely to be working in customer service roles than men.

Like women’s work everywhere, retail workers’ labour has been drastically undervalued. The reality is, major retailers have been able to reap massive profits off the back of this undervaluation. Many of these women – and the men they work alongside – are now pursuing equal pay claims to right this wrong.

Many of the skills required by shop floor workers are overlooked when it comes to awarding pay. The emotional labour of working in a customer-facing role, whether it’s the patience required in dealing with customers or dealing with the competing priorities of customer queries while stacking a shelf, is simply not reflected in rates of pay.

Addressing these issues, valuing the work of women retail workers, and correcting the systemic issues of low pay and poor terms and conditions that have dogged the sector for years, need not be beyond our reach to solve. They could include collective bargaining with independent trade unions; a fair distribution of profit with workers; pay ratios to keep a cap on excessive director remuneration; or fair, robust and transparent job evaluation schemes that allow women’s work to be properly valued and paid.

Retailers supporting customers during the cost of living crisis, whether by offering soup to pensioners for £1 or expanding discount food ranges, should first look at what they can do to keep their side of the street clean when it comes to the hundreds of thousands of low-paid workers they employ.

Rampant profits and handsome dividends need not be the only goal here. As great British institutions, there is an opportunity to demonstrate their values are more than just catchy slogans and soundbites. At a time when ‘every penny counts’, action on the cost of living crisis starts with the workers they rely on.