The UK supermarket chain Sainsbury’s has stated that its workers’ hourly pay will be raised to £12.60, a 5% increase. However, there will be reluctance to recruit new staff this year because of the rising costs. The pay increase will be introduced in two phases, to help manage the particularly tough cost inflation environment. Sainsbury’s CEO Simon Roberts also said that the company would have to look very carefully at all hiring decisions for the future.
In addition to outlining the pay rise, Sainsbury’s revealed its trading figures for the crucial Christmas period, during which comparable sales increased by 2.8%, boosted mainly by food sales, while sales at Argos fell. Sainsbury’s predicts a cost increase due to National Insurance payments by employers, which were laid out in the autumn budget. Sainsbury’s said that its expected full-year profits would rise by about 7% to more than £1bn.
Despite the higher costs, Mr Roberts said Sainsbury’s would do everything it could to avoid raising prices. However, in November, Sainsbury’s was amongst the companies which issued warnings that price rises were a certainty following the budget. Roberts said Sainsbury’s was making “balanced choices.” The hourly rate for Sainsbury’s and Argos workers will initially increase from £12 to £12.45 in March, before being raised to £12.60. For those working in London, the rate will increase from £13.15 to £13.70, after which it will rise to £13.85.
The current hourly wage of Sainsbury’s is higher than the National Living Wage of £11.44 an hour. The Chancellor of the Exchequer Rachel Reeves announced an increase to the National Living Wage of £12.21, which will happen in April. She also detailed the rise in National Insurance payments by employers which will cost Sainsbury’s about £140million. Reeves announced that she had “decided the right thing to do was to ask businesses and the wealthiest in our country to pay a bit more”.
Sainsbury’s full-year profit is expected to rise over £1 billion, an increase of about 7% from the last year. However, Mr Roberts stated that there would be support to reverse the “unexpected” National Insurance rise if there was any chance to review such decisions. Sainsbury’s revealed that its figures of festive period sales showed that customers left their Christmas shopping later than ever. It also revealed a 40% surge in party food sales (similar to its rival Lidl), as more customers opted for big festive celebrations
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