LONDON (Reuters) -British supermarket group Sainsbury’s said on Thursday it would invest 200 million pounds ($254 million) on raising the pay of 120,000 workers by more than 9% to a level above the new rate of the government-mandated national minimum wage.
Sainsbury’s, one of Britain’s biggest private sector employers, said that from March it would pay staff outside of London 12 pounds an hour and staff in London 13.15 pounds an hour, up from 11 pounds and 11.95 pounds currently.
Britain’s minimum wage, called the National Living Wage, will increase by 9.8% to 11.44 pounds an hour from April 2024, making it one of the highest as a share of average earnings of any advanced economy.
Sainsbury’s latest pay rise could catch the attention of the Bank of England, which is keeping a close eye on inflation pressures as it mulls the direction of interest rates.
The supermarket group is due to update on Christmas trading on Jan. 10. Industry data published on Wednesday showed it has performed well. Its shares are up 30% over the last year.
Separately on Thursday, clothing retailer Next said it would spend 60 million pounds more on staff wages in its 2024/25 financial year.
Last month, the boss of electricals group Currys, said the government’s decision to hike the national minimum wage while refusing to reform the business rates system showed it cared little for the country’s retail industry.
($1 = 0.7879 pounds)
(Reporting by James Davey; Editing by William James and Jan Harvey)