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Tens of thousands of workers at major supermarket to get 5% pay rise this year despite Budget tax hike
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TENS of thousands of supermarket workers will see their pay go up by 5% this year despite a government tax raid on businesses.
Sainsbury's has said it will bump up the salaries of its hourly-paid members of staff in two separate rises.
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Hourly pay will be hiked from £12 currently to £12.45 in March and then to £12.60 per hour in August.
Workers based in London will see their pay packets hiked from £13.15 to £13.70 then £13.85.
The pay boost comes after Sainsbury's cheered its "biggest ever" Christmas period, with grocery sales up 4.1% in the 16 weeks to January 4.
Overall group sales, not counting fuel, were also up 2.7% across the same time period.
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But the announcement of the pay rise also comes after Sainsbury's warned of raising prices for shoppers after the Government's Autumn Budget tax raid on businesses.
Simon Roberts, chief executive of J Sainsbury's PLC, said: "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.
"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 said the two pay rises for 118,000 members of staff will take the total salary for a full time colleague outside London from £22,882 to £24,026.
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By August, pay for hourly-paid workers will have been hiked by 58% since 2018, Sainsbury's said.
The pay boost will also see workers' salaries match the Real Living Wage, a voluntary wage offered by thousands of businesses.
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The latest news from Sainsbury's, which means by March they will pay store assistants more than Aldi, comes despite the retailer warning of price rises for shoppers following the Government's Autumn Budget.
Bank of England deputy governor Sarah Breeden also warned yesterday the hikes could lead to lower wages for staff in the "long run".
Mr Roberts told The Sun in November the supermarket was facing a £140million hit from the hike to employer National Insurance contributions (NICs) in April.
Currently, businesses pay employer NICs at 13.8% on salaries of £9,100 and above.
But this rate will be hiked to 15% and the threshold at which they are paid lowered to £5,000 from April 6.
Mr Roberts said in November: "It will lead to inflation and it’s pretty clear it’s going to come pretty fast.
“Given the low margins of the industry, there isn’t the capacity to absorb this level of unexpected cost inflation.”
Sainsbury's is one of a number of retailers and businesses that have warned the upcoming hike to NICs, as well as the rise in the minimum wage, will force them to rise prices for customers.
The British Retail Consortium (BRC), which represents retailers, suggested earlier this week food prices will go up an average of 4.2% later this year.
Posh chain M&S also cautioned shoppers could see prices rise across its branches.
Boss Stuart Machin said it would pass costs on "as little as possible" but had been forced to tweak its business plan for the coming years.
Fashion retailer Next has also warned it will have to raise shop prices by around 1% this year to cover the impact from the Budget's tax raid.
Bakery chain Greggs has already bumped up the price of its sausage rolls, as well as other products.
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Meanwhile, pub chain Wetherspoons' boss Tim Martin warned it may be forced to raise the cost of drinks.
The Sun approached Sainsbury's for a comment.
How to save money on your food shop
Consumer reporter Sam Walker reveals how you can save hundreds of pounds a year:
Odd boxes - plenty of retailers offer slightly misshapen fruit and veg or surplus food at a discounted price.
Lidl sells five kilos of fruit and veg for just £1.50 through its Waste Not scheme while Aldi shoppers can get Too Good to Go bags which contain £10 worth of all kinds of products for £3.30.
Sainsbury's also sells £2 "Taste Me, Don't Waste Me" fruit and veg boxes to help shoppers reduced food waste and save cash.
Food waste apps - food waste apps work by helping shops, cafes, restaurants and other businesses shift stock that is due to go out of date and passing it on to members of the public.
Some of the most notable ones include Too Good to Go and Olio.
Too Good to Go's app is free to sign up to and is used by millions of people across the UK, letting users buy food at a discount.
Olio works similarly, except users can collect both food and other household items for free from neighbours and businesses.
Yellow sticker bargains - yellow sticker bargains, sometimes orange and red in certain supermarkets, are a great way of getting food on the cheap.
But what time to head out to get the best deals varies depending on the retailer. You can see the best times for each supermarket here.
Super cheap bargains - sign up to bargain hunter Facebook groups like Extreme Couponing and Bargains UK where shoppers regularly post hauls they've found on the cheap, including food finds.
"Downshift" - you will almost always save money going for a supermarket's own-brand economy lines rather than premium brands.
The move to lower-tier ranges, also known as "downshifting" and hailed by consumer expert Martin Lewis, could save you hundreds of pounds a year on your food shop.