Sainsbury's Pledges Pay Rise Amid Cautious Hiring Strategy

Sainsbury’s announces a 5% hourly pay increase for employees, raising wages from £12 to £12.60, segmented into two phases to navigate a challenging economic climate influenced by rising costs, particularly due to National Insurance taxes. Despite a strong Christmas trading update revealing a 2.8% boost in comparable sales, notably in food, and an expected full-year profit increase of 7% to over £1bn, the supermarket chain remains cautious about new hiring. Chief Executive Simon Roberts emphasizes the need to carefully evaluate hiring practices in light of cost pressures.

Key increases include wages rising for London staff from £13.15 to £13.70 in March, then to £13.85, surpassing the expected rise in the National Living Wage. As Sainsbury’s grapples with inflationary pressures, including an estimated £140m additional cost from the National Insurance hikes, Roberts indicates a desire to avoid passing those costs to consumers through price increases, acknowledging that many retailers anticipate raising prices due to these financial challenges. The retail giant’s festive sales data highlights changing consumer habits, with shoppers opting to finalize their Christmas purchases closer to the holiday, while also noting a significant increase in demand for party foods, reflecting trends in shopping for larger festive gatherings.