Major investors have launched a campaign calling for Sainsbury’s to help tackle the cost of living crisis by becoming the first supermarket group to pay all its workers the “real living wage” of £9.90 an hour.
Legal & General Investment Management, Nest (National Employment Savings Trust), which is Britain’s largest workplace pension scheme, and several MPs have formed a coalition to push for the change after reports that increasing numbers of supermarket workers are having to turn to food banks to feed themselves and their families.
The group of investors – whose institutional members manage £2.2tn of assets – will file a shareholder resolution on Monday calling for Sainsbury’s to accredit as a living wage employer. The resolution will be put to the vote at the Sainsbury’s annual general meeting, planned for 7 July. The group said it would be writing to all UK supermarkets urging them to take the same action.
Set by the Living Wage Foundation, the nationwide real living wage is currently £9.90, while in London it is £11.05. This is set to rise in November and compares with the statutory minimum wage of £8.91, which rises to £9.50 on 1 April. About 9,000 or more employers have adopted the voluntary pay measure, including half of the FTSE 100 and some prominent retailers such as Ikea and Lush, but no UK supermarket has yet signed up.
Despite official recognition of their status as key workers during the pandemic, supermarket staff continue to be one of the largest groups of low-paid workers in Britain, according to the investor campaign group ShareAction, which is coordinating the resolution.
Sainsbury’s is the UK’s second largest food retailer. It operates more than 600 supermarkets and 800 convenience stores, and in January it said it expected to report underlying profits of at least £720m for the financial year to March 2022 – £60m more than it had previously thought. Last year the retailer came under fire from some quarters when it emerged that its chief executive, Simon Roberts, was awarded a pay package totalling more than £1.3m for 2020-21.
At the same time, many supermarket workers have been struggling to keep their heads above water. Research conducted by the Organise network found that one in three Sainsbury’s workers regularly worried about putting food and drink on the table.
Sainsbury’s is paying more than some rivals: earlier this year it announced an increase in basic hourly pay for all employees. It lifted rates for directly employed staff from £9.50 to £10 an hour outside London, and matched the living wage rate for employees in inner London. Asda, meanwhile, was criticised last month by the GMB union for imposing a below-inflation pay increase that means its staff will earn £9.66 an hour from April, while Tesco’s current hourly rate is £9.55.
However, ShareAction said the new Sainsbury’s rate of £10.50 for workers in outer London was “considerably lower” than the £11.05 real living wage for the region.
On top of that, it added, Sainsbury’s had not made any commitment relating to the pay of third-party staff such as cleaners and security guards, or any pledge that wages would continue to increase in line with the cost of living in future years.
The shareholder resolution calls on the retailer to remove this uncertainty by becoming a living wage-accredited employer by July 2023. It is thought to be the first resolution calling for a listed firm to take this step.
Individual shareholders backing the resolution include the Labour MPs Siobhain McDonagh and Helen Hayes.
Sainsbury’s, which directly employs more than 189,000 workers, said that in recognition of the “extraordinary work” its staff do, it had this month increased its basic hourly rate by 5.3%.
A spokesperson said: “We pay more than many of our competitors, and across the board colleague feedback has been positive to our pay review … Our competitive pay rates are in addition to our colleague discount programme, matching pension scheme and recently enhanced family leave policy.
“As we balance the needs of all our stakeholders, particularly in the light of the current cost of living challenges that many people in the UK face, it is vital that we not only pay our colleagues fairly but that we are able to invest significantly to offer customers great value.”