Shopfloor pay ranking: How much do UK retailers pay?

It was just two years ago that Morrisons became the first supermarket to pay its workers more than £10 an hour. This year, half the UK’s 10 biggest grocers have stormed up to the £11 mark.

Until recently, tense competition by the supermarkets to retain talent resulted in an even playing field, with Tesco, Asda, Sainsbury’s, Aldi and Lidl all awarding £11 per hour. But Aldi upped the ante again last month, raising its base pay by 13% to £11.40.  

Inside the M25, Aldi is also playing in a league of its own. At £12.85 per hour, the discounter’s pay packets are almost 70p per hour thicker than any other retailer on the list.  

The only others to break the £12 threshold for London are Asda and M&S. This also makes Aldi the retailer with the widest base pay gap between its London staff and those based elsewhere in the UK, with a £1.45 per hour premium for those in the capital.

_{*Undisclosed by the retailer: estimate from online staff surveys on Breakroom. An average may be provided for retailers with differing age-band rates. Note: Some rates may be lower for younger staff.}

Beyond the supermarkets, the next highest-paying retailers in our ranking are Ikea and Boots, both just shy of the £11 threshold at £10.90 per hour. The retailers also mirror one another with pay within the M25, at £11.95 per hour.  

According to the most recent record from the Office for National Statistics, the average regular pay growth for jobs in the private sector was 7%. But the UK’s biggest retailers are adding to their payrolls at a significantly steeper rate.  

M&S, Tesco and Sainsbury’s all claim to have made their “biggest ever investment” in pay this year, bumping their shopfloor staff’s pay by 9%, 7% and 10% respectively.

B&Q and Screwfix owner Kingfisher’s staff saw an 8% rise, while Aldi and Primark’s latest bumps represent 13% and 12% growth. 

When considering the cost pressures on retailers and stark warnings from the government that pay rises – albeit in the public sector – could “entrench inflation”, this pace of change is staggering. But retail’s great pay climb began long before the cost-of-living crisis, says EY’s partner for consumer products and retail Silvia Rindone. 

“Post-Covid, there was an entire segment of workers that shifted into other industries. So wages became a lever to attract talent and secure enough manpower to be able to function as a business,” she says. 

“Then we had supply chain challenges, which triggered a talent agenda to ensure that businesses could secure a higher level of service.

“Now we have inflation and the cost-of-living crisis, and retailers must react to that. They started to suffer and were in danger of losing people unless they provided wages that were in line with inflation or travelling in the same direction.” 

Typically, the retailers doling out the most generous pay rises are those pursuing the most ambitious expansion plans.

Aldi has set its sights on bringing its 990 store total up to 1,200, Primark is aiming for 27 new stores this financial year and just last week Screwfix announced it was on track to open 85 locations by the end of 2023.

Towards the bottom of the table, retailers who are struggling in today’s market tend to have also held their nerve on wages. Morrisons’ pay now sits at £10.20 and John Lewis & Partners’ at £10.30. 

Though they may have served retailers well in keeping hold of staff when eligible workers have been thin on the ground, pay rises are now about to meet an inflection point, according to Rindone.

“There is a balance to be had,” she says. “If you continue to increase wages, you will eat into your profitability and at this point you probably cannot pass any more costs to consumers – there has to be a limit.

“But we are likely to see a cooling down of the inflationary environment this year, so that means there’s going to be less pressure on pay.

“There’s also a lot going on in the political sphere with regards to easing off visas for certain segments of workers. We don’t know whether that is going to apply to retail, but there’s a lot of movement to just ease the pressure on the supply of labour and that could settle wages, too.” 

The picture on wages will become clearer when the Bank of England’s Monetary Policy Committee sets interest rate levels in May. However, even if a bucket of cold water is poured on inflation, it seems hard to believe that retailers will retreat in what is now a fierce battle to keep hold of the sector’s top talent.  

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