Lidl first supermarket to pay ‘living wage’

From 1 October, Lidl says employees will be paid at least £8.20 an hour (£9.35 in London), meaning an average wage increase of £1,200 a year, with 53 per cent of staff benefiting. It will be paid to all staff, regardless of age.

It currently pays £7.30 an hour (£8 in London) and says the increase will cost it £9m, but prices will not rise to compensate.

The hourly rate paid by Lidl is based on what it expects the Living Wage Foundation (LWF) to recommend in November. If the LWF opts for a higher figure, Lidl will follow suit.

Valued

Ronny Gottschlich, chief executive of Lidl UK, said: “We recognise that every employee forms an integral part of team Lidl, and each individual’s contribution is valued. It’s therefore only right that we show our commitment, in the same way that the team commit to the business and our customers each and every day, by ensuring a wage that supports the cost of living.

“As a result, Lidl employees will be amongst the best paid in the supermarket sector, and that’s something I feel incredibly proud about.”

Lidl’s decision follows Chancellor George Osborne’s announcement in his last budget that a compulsory national living wage of £7.20 an hour will be introduced for the over-25s in April 2016, rising to £9 by 2020.

The current minimum wage for adults of £6.50 an hour is due to rise to £6.70 from 1 October, as recommended by the Low Pay Commission. The minimum wage recommended by the Living Wage Foundation is based on the cost of living and paid by many companies in the UK.

Lidl has seen an increase in customer numbers, with half of British households shopping there in the last year, and record sales of £4bn.

Competitors

A spokesman for Aldi, Lidl’s budget competitor, said: “We offer competitive rates of pay for store staff that are above the proposed national living wage. Depending on their level of experience, our store assistants can earn up to £9.50 per hour, and these rates are regularly reviewed to help us attract and retain the best talent.”

Lidl is trying to attract customers from more up-market rivals by opening stores in affluent areas.

Sainsbury’s pays store staff £7.36 an hour, with annual bonuses, pensions, life insurance and discount cards on top. It also says it is one of the few retailers to pay employees for breaks.

Tesco pays £7.39 an hour (£8.40 in London). A Tesco spokesperson said the company paid “one of the highest hourly rates in retail”, along with pensions, staff discounts and a share scheme.

A British Retail Consortium spokesperson said: “Since the chancellor’s summer budget, there has been increased focus on rates of pay in the retail industry. Retailers are looking closely how they reward their employees and the potential impact, both now and in the future, of proposals such as the national living wage. The conclusions they reach will be as many and varied as retail businesses themselves.

“Whatever approach retailers take to their total reward packages, the real key to raising more people out of low pay will rest in increasing productivity.”