Morrisons has become the first UK supermarket to break the £10 an hour pay barrier just as the spotlight is being shone on poor pay levels in an industry where workers are in the frontline of the pandemic.
The Bradford-based supermarket said it would guarantee pay of at least £10 an hour with the new deal, which starts in April, ushering in a significant pay increase for nearly 96,000 colleagues. Its minimum hourly pay now stands at £9.20 an hour.
The good news from Morrisons came as new research from Citizens UK calculated that 45%, or 410,000 supermarket workers, including Morrisons and Sainsbury’s staff, now earn below the real living wage of £10.85 an hour in London and £9.50 an hour across the rest of Britain. The figure, set by the Living Wage Foundation, is based on everyday living costs in the UK.
In April, the minimum wage set by the government will rise from £8.72 to £8.91.
The research also highlighted the scale of the “pay gap” – the difference between the highest earners and the rest – for the UK supermarket industry with Tesco, Morrisons and Ocado among the top 10 FTSE350 companies with the biggest gulfs between boardroom and colleague pay.
David Potts, Morrisons’ chief executive, described the company’s new pay rate as a “symbolic and important milestone that represents another step in rewarding the incredibly important work that our colleagues do up and down the country”.
“Morrisons colleagues have earned their status as key workers, and this pay increase, many times over,” said Potts, who earned £4.2m last year.
Morrisons is footing the majority of the extra wage costs but a quarter of the sum is coming from scrapping of the discretionary annual colleague bonus scheme. The retailer is also paying an inner London weighting of 85p and 60p for outer London.
Joanne McGuinness, Usdaw national officer, said the £10 an hour basic rate it had negotiated was the “leading rate of the major supermarkets”. “It is a big step forward and I hope that the deal is supported by our members,” she said. “They provide the essential service of keeping the nation fed and deserve our support, respect and appreciation. Most of all they deserve decent pay and this offer is a welcome boost.”
Nearly 7,000 companies are living wage employers but as yet no UK supermarket has been accredited by the Living Wage Foundation. Matthew Bolton, executive director of Citizens UK, said that despite the economic carnage caused by the pandemic, over 1000 companies had managed to find the money to become real living wage employers and “pay the lowest waged staff that bit extra”. “Yet not a single major supermarket pays all staff and contractors the living wage. It is unacceptable.”