Aldi has raised pay for shop workers for the second time in a year in the latest sign of the intense competition for workers in the UK.
From September, the grocery discounter is to put up hourly pay by 40p to a minimum of £10.50 outside the M25 and to £11.95 in London, an increase of at least 3.5%.
Unlike most other supermarkets, the rate also covers pay for breaks in shifts, which the company said was worth £830 a year for the average shop worker.
The move comes as supermarkets compete for staff against other high street, travel and hospitality businesses after pandemic restrictions eased, in a labour market where supply has been restricted by Brexit worker visa limits.
Tesco and the sandwich chain Pret a Manger have both put pay up twice for workers in the past year while Asda raised its pay to £10.10 an hour in July after unions criticised it for lagging behind rival chains with a rate of £9.66 introduced in April.
Hospitality businesses, including restaurants and hotels, are also being forced to increase pay and in some cases limit trading hours as they struggle to find enough suitably qualified workers to cope with a surge in demand.
Aldi is particularly in need of more recruits to staff its new stores as it competes with fellow German-owned discounter Lidl to be the UK’s fastest growing grocery chain. Both are thriving as shoppers switch at least some of their spending away from traditional supermarkets in an effort to keep down costs amid significant food price inflation.
Giles Hurley, the chief executive of Aldi UK and Ireland, said: “Our new rates of pay maintain Aldi’s position as the UK’s highest paying supermarket.
“This announcement recognises the amazing contribution our colleagues make in serving local communities across the country. Their outstanding efforts have ensured that our customers continue to have access to fresh affordable food, every single day.”
The new rates at Aldi, which is now the UK’s fifth largest supermarket and poised to overtake Morrisons for the No 4 slot, exceed the Living Wage Foundation’s current recommended real living wage of £9.90 an hour nationally and £11.05 inside the M25.
All the major supermarkets including Tesco, Sainsbury’s, Morrisons, Asda and Lidl now pay above the independently verified living wage. However, none are accredited to the scheme, which requires them to ensure that all third-party contractors, such as security staff and cleaners, are also paid the living wage.
Campaigners sought to put pressure on Sainsbury’s to sign up to the scheme with a shareholder motion at its annual meeting this month, but did not win enough support from investors for the move.
The real living wage rate is expected to rise significantly in October when the independent body is due to publish its new recommendation a month earlier than usual.