(qlmbusinessnews.com . Tues 11th Feb, 2025) London, UK —
Supermarket Shake-Up: Lidl Leads with Higher Pay Amid Job Loss Warnings
Lidl has announced pay rises for thousands of its UK workers, taking its wages above planned increases by competitors such as Sainsbury's and Aldi. The German discount supermarket chain will raise its entry-level hourly wage from £12.40 to £12.75, benefiting approximately 28,000 employees.
The move comes ahead of the government's statutory National Living Wage increase in April, which will see the hourly rate for those aged 21 and over rise from £11.44 to £12.21.
Lidl, which operates over 970 stores and 14 warehouses across the UK, said that hourly pay for staff could increase to £13.65 depending on service length. In London, new starters will earn £14.00 per hour, with the potential to reach £14.35.
Competitive Edge
Lidl's pay hike puts it ahead of Aldi, which recently announced it would pay store assistants at least £12.71 per hour nationwide, with higher rates in London.
Sainsbury's, meanwhile, plans to raise wages to £12.45 per hour this March, followed by a further increase to £12.60. However, the supermarket has also announced job cuts, affecting 3,000 roles as it shuts its remaining cafés and closes patisserie and pizza counters.
While Sainsbury's had already been working towards a £1bn savings plan, the rise in employers' National Insurance Contributions (NICs) announced in the Budget is believed to have contributed to its restructuring efforts.
Industry Concerns
Retailers have voiced concerns that the combination of the minimum wage hike and higher NICs could lead to job losses, price increases, and store closures. M&S boss Stuart Machin recently criticised the government, stating that retailers were being “raided like a piggy bank” due to tax changes.
The Treasury has defended the increases, arguing that exemptions for smaller businesses mean over half of employers will either see no change or a cut in their NI bills.
A recent survey by KPMG and the Recruitment and Employment Confederation (REC) found that uncertainty in the economy is causing firms to hold back on recruitment. The number of permanent job vacancies fell sharply in January.
Neil Carberry, REC chief executive, noted that the economic landscape remains challenging: “An autumn of fiscal gloom, difficulty navigating significant tax rises, and costly new employment rights are all acting as brakes on progress.”
Lidl's decision to raise wages amid these challenges underscores its commitment to maintaining a competitive edge in the retail sector while navigating the economic uncertainties affecting the industry.
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