LONDON (Reuters) – Sainsbury’s, Britain’s second largest grocery store group, plans to extend the bottom fee of pay for employees working in shops however cease paid breaks and an annual bonus, in a transfer it stated would go away most workers higher off.
Sainsbury’s employs 195,000 in Britain and Ireland and is the UK’s second greatest non-public sector employer after rival Tesco.
It stated on Tuesday it could spend an additional 100 million kilos on a plan that may additionally simplify the variety of in-store roles from 22 to 5.
Sainsbury’s, which additionally owns the Argos chain, stated it could finance the pay enhance via an ongoing value financial savings programme throughout the business.
All of Britain’s huge 4 meals grocers – Tesco, Sainsbury’s, Asda and Morrisons – are in search of value financial savings to maintain costs down to allow them to higher compete with discounters Aldi and Lidl, that are nonetheless profitable market share.
Under Sainsbury’s proposals, that are topic to worker session, the bottom fee of pay would rise from eight kilos an hour to 9.20 kilos from September this 12 months. Staff in interior London could be paid 9.80 an hour.
However, cost for breaks and an annual discretionary workers bonus could be eliminated.
A brand new contract for all 130,000 in-store workers, no matter age or size of service, would even be launched.
A spokeswoman for Sainsbury’s stated a typical in-store workers member would see their annual pay rise eight.four % to 17,581 kilos for 36.75 hours per week from 16,224 kilos for 39 hours at present.
Sainsbury’s stated “a small proportion” of staff may very well be adversely impacted by its proposals. It stated it could make top-up funds for 18 months to make sure no staff earn lower than they do at present over that interval.
Market chief Tesco’s primary hourly fee is at present eight.02 kilos, growing in July to eight.18 kilos and in November to eight.42 kilos. It retains a workers bonus plan however doesn’t pay for breaks.
Sainsbury’s stated in November it anticipated to attain value financial savings of 540 million kilos in its 2017-18 monetary 12 months and was concentrating on “at least” one other 500 million kilos in financial savings over the three years beginning in 2018-19.
In January, Sainsbury’s introduced a restructuring of its retailer administration.
Separately on Tuesday business information confirmed Sainsbury’s was the worst performer of the “big four” within the 12 weeks to Feb. 25.
Sainsbury’s has reported three straight years of falling revenue and analysts are forecasting a fourth.
Shares in Sainsbury’s have been down 1.eight % at 1313 GMT.
Reporting by James Davey and Kate Holton; Editing by Mark Potter