Sainsbury's lifts pay after shareholder pressure

Sainsbury's has said it is raising the pay for some of its London staff following pressure from shareholders.

Workers at outer London stores will be paid the same £11.05 hourly rate as inner London colleagues.

It means all Sainsbury's shop workers will get the voluntary Real Living Wage, which is higher than the compulsory National Living Wage.

It follows Tesco's announcement on Thursday of a pay increase for their staff.

In March, Sainsbury's increased its basic rate of pay from £9.50 to £10 an hour for staff across its supermarkets and Argos stores.

At the same time, outer London workers' pay climbed to £10.50 an hour but inner London pay climbed to the Real Living Wage rate of £11.05.

But last month, a group of major investors called on Sainsbury's to commit to paying all its workers the Real Living Wage.

Sainsbury's new pay deal means all its supermarket workers across the country will be paid the relevant Real Living Wage, matching earlier moves by Lidl, Aldi and Marks & Spencer.

Simon Roberts, chief executive of Sainsbury's, said the company "wanted to help colleagues plan and manage the cost of living in the year ahead".

"We are always looking at what more we can do and have therefore decided to increase pay rates for outer London to £11.05 so that Sainsbury's and Argos retail colleagues are paid the Real Living Wage and London Living Wage from May," he added.

Although Sainsbury's has boosted pay for its employees, the supermarket has made no commitment relating to the pay of third-party staff, such as cleaners and security guards.

• Real Living Wage rises to £9.90 an hour

• How much is the minimum wage?

Last year, Morrisons became the first UK supermarket to announce it would pay at least £10 an hour from April 2021 which was quickly followed by its rivals.

Lidl is the highest paying supermarket, with wages increasing to £10.10 an hour outside London and to £11.30 within the M25 in March.

Ged Futter, analyst for The Retail Mind consultancy and a former buyer at Asda, told the BBC's Today programme that competition between supermarkets had prompted Tesco and Sainsbury's to raise their wages this week - with an "Aldi match" being one factor.

"You need to be offering a salary that is the same as your competitors," he said.

"What you will see is that those who don't follow suit will find that their colleagues start looking round for other opportunities.

"People will look for where they can get the best working conditions."

The Real Living Wage is currently £11.05 in London and £9.90 for the rest of the UK.

Half of the companies listed on the FTSE 100 share index are among the more than 9,500 accredited Living Wage employers.

It is set by the Living Wage Foundation charity and is different to the National Living Wage, which sets out the minimum a worker can be paid per hour by law.

The National Living Wage applies to workers over the age of 23, and is currently £9.50 per hour.

There is also the National Minimum Wage for those aged 21 to 22, which is currently £9.18.