Sainsbury’s will increase the pay of its 118,000 store and supply chain staff by 5% throughout 2025.
In a bid to mitigate the impact of what it called the “challenging environment” as a result of Rachel Reeves’ £40bn budget, Sainsbury’s will spread the increase over two separate pay rises throughout the year.
From March, hourly pay will rise to £12.45, from £12, nationwide, and to £13.70, from £13.15 in London. In August, this will increase again to £12.60 and £13.85 respectively. It marks a 58% increase in the rate of hourly pay at Sainsbury’s since 2018.
“Our people are fundamental to achieving our Next Level Sainsbury’s plan and we are pleased to announce that we will raise pay for our hourly-paid colleagues by 5% in the year ahead, split into two separate increases to help manage a particularly tough cost inflation environment,” said Sainsbury’s CEO Simon Roberts.
“We believe in rewarding our colleagues well for delivering leading service and productivity and we will be the best-paying UK grocer from March.”
Sainsbury’s made the announcement alongside the publication of its third quarter results, and what it claimed were “record” Christmas sales on 10 January.
The supermarket usually announces an annual pay increase in January to coincide with the end of its financial year in March.
However, it had made the decision to phase the increase over two-steps in light of the “obvious and particular cost environment challenges” Sainsbury’s faced as a result of the 1.2% rise in employers’ National Insurance set to come into force from April, which had added an expected £140m to Sainsbury’s employment costs.
Budget prompted ’careful’ choices
Asked whether Sainsbury’s planned to limit hiring as a result this year, Roberts conceded Sainsbury’s would have to “think very carefully” about hiring decisions, to avoid adding costs to the business “that it can’t afford”.
“That’s not different to any time before, but the new pressures that have come at us have just made that an even greater focus,” he said. “We need to be even more precise in the decisions we make.” He didn’t say whether Sainsbury’s would look to reduce headcount further than the 1,500 roles announced as part of its Next Level strategy in February 2023.
The latest pay rise was welcomed by the Union of Shop, Distributive & Allied Workers (Usdaw) of which Sainsbury’s signed a long-term agreement of understanding in 2023.
Usdaw national officer Bally Auluk said: “The working relationship between Usdaw and Sainsbury’s continues to strengthen, and we are pleased that the company has again worked closely with our Union’s representatives, during the recent pay consideration meeting.
“The business has decided to make a pay award totalling 5%, despite lower inflation rates than last year and following on from previous significant pay increases. The cost of living continues to be a key concern for our members, so the business’ decision to respond in such a positive manner, by matching the real living wage once more, is a welcome one for our members.”
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