From next month, all entry-level Lidl UK employees will receive a minimum wage of £8.20 an hour in England, Scotland and Wales and £9.35 an hour in London reports The Times.
This equates to an average wage increase of £1,200 a year, or 14 per cent, and more than half of Lidl UK’s 17,000 workforce and all age brackets will benefit.
The rates are those which the Living Wage Foundation, the community-run organisation, is expected call for next month.
The German discount chain has announced the move seven months before George Osborne’s compulsory national living wage — which will be set at £7.20 an hour — comes into effect in April.
Ronny Gottschlich, the chief executive of Lidl UK, said that he could potentially decide to pay the grocer’s workers even more if the Living Wage Foundation decided to set its rates higher than expected.
He said: “Lidl UK will begin paying the rate it expects the Living Wage Foundation to set in November 2015, a full month ahead of the official announcements, and has also pledged to match the new living wage rate should it be higher than predicted.”
Mr Gottschlich added that the decision would require a £9 million investment from Lidl but said that it was “only right that we show our commitment [to employees] in the same way that the team commit to the business and our customers each and every day”.
He said that Lidl, which has been eating up market share from its larger rivals, wanted to ensure that it paid a “wage that supported the cost of living” and added that he was “proud that Lidl employees would be among the best paid in the supermarket sector”.
Lidl’s move will be a shot across the bows of other grocery retailers that are still deciding how to deal with Mr Osborne’s national living wage proposals.
Retail, which is Britain’s largest private employer, with 3 million workers, will be one of the main sectors affected by the summer budget ruling.
The new wage, which is for workers aged 25 and over, will initially be set at £7.20 an hour, with a target of it reaching more than £9 an hour by 2020. Both part-time and full-time workers will receive the higher wage. Workers under 25 and apprentices will receive an increase, albeit at a lower level.
J Sainsbury will raise its wages for shopworkers by 4 per cent in April with 85 per cent of the group’s 161,000 staff receiving a new rate of £7.36 an hour.
The proposed £7.20 national living wage tariff reflects a 4 per cent pay rise. Sainsbury’s also went further than the proposals by extending the rate to the under-25s.
Wm Morrison, the struggling grocery chain that employees well over 100,000 people, said last week that it expected the hit to be “in the tens of millions of pounds”.
Asda pays shopfloor staff £6.89 outside London, which will rise to £7 an hour. Morrisons pays between £6.83 and £7.79, according to the regional cost of living. Tesco said in July that it would not increase its overall pay but was still hammering out deals with unions.
