Sainsbury's urged to up pay to match cost of living

A group of major investors is calling on Sainsbury's to commit to paying all its workers the Real Living Wage to tackle the rising cost of living.

The Real Living Wage aims to ensure wages cover everyday needs and is voluntarily paid by around 9,500 firms.

It is higher than the compulsory national minimum wage.

Sainsbury's said it had recently increased its basic hourly rate by 5.3% in recognition of the "extraordinary work" of its staff.

The investor coalition, brought together by responsible investment charity ShareAction, includes the UK's largest asset manager, Legal and General Investment Management, and the largest workplace pension scheme, Nest.

It also includes 108 individual shareholders, including Labour MPs Siobhain McDonagh and Helen Hayes.

The group has filed a shareholder resolution calling for Sainsbury's to become an accredited Living Wage employer. Shareholders will get to vote on the proposal at the supermarket's annual general meeting in July.

The group will also write to all UK supermarkets next week urging them to take the same step.

Half of the companies listed on the FTSE 100 share index are among the more than 9,500 accredited Living Wage employers. Retailers such as Ikea have also committed to paying the Real Living Wage but no major supermarkets are accredited.

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

The new rate is higher than the Real Living Wage for outside the capital. For staff in inner London it pays £11.05 an hour which matches the Real Living Wage.

However, its rate of £10.50 for workers in outer London is lower than the Real Living Wage for that region.

Sainsbury's, which has more than 600 supermarkets and 189,000 employees, has also made no commitment relating to the pay of third-party staff, such as cleaners and security guards.

The Real Living Wage is different to the national minimum wage, which sets out the minimum a worker can be paid per hour by law.

The National Living Wage, which applies to workers over the age of 23, is currently £8.91 per hour, increasing to £9.50 per hour from 1 April.

The National Minimum Wage, for those aged 21 to 22, will rise from £8.36 to £9.18 from 1 April.

People in the UK are facing increased pressure from living costs, with inflation rising at its fastest rate for 30 years amid surging fuel, energy and food prices.

Martin Buttle, head of good work at ShareAction, said: "Low paid workers in the supermarket sector are being hit incredibly hard by rising living costs, yet we all owe them so much following the pandemic. We hope this resolution will catalyse long overdue change."

A spokeswoman for Sainsbury's said: "We pay more than many of our competitors, and across the board colleague feedback has been positive to our pay review.

"As we balance the needs of all our stakeholders, particularly in the light of the current cost of living challenges that many people in the UK face, it is vital that we not only pay our colleagues fairly but that we are able to invest significantly to offer customers great value," she added.