Sainsbury’s will increase salaries for staff at its supermarkets and Argos stores and pay a bonus to frontline workers, the third since the pandemic started, the retailer said.
Sainsbury’s staff currently receive £9.30 an hour and Argos workers get £9 an hour, but this will rise to £9.50 from March.
Staff at central London stores will see their hourly pay rise to £10.10.
A one-off 3% annual bonus will also be paid to staff, meaning a full-time worker will take home an extra £530.
Supermarkets have been one of the biggest winners during the global pandemic, remaining open throughout and enjoying strong sales as non-essential retailers, pubs, cafes and restaurants remain shut.
The latest pay rise from Sainsbury’s means workers at the retailer have seen salaries increase 24% over the last five years.
The bonus is the third since the pandemic and means the company has handed out more than £100 million in extra cash to workers.
A 10% pay boost was made between March and April last year and a second boost of 10% for four weeks in November.
In March 2020, Sainsbury’s also increased pay for store staff to £9.30 per hour, while pay for workers in central London – Zones 1 and 2 on the London Underground map – received £9.90 per hour.
But several supermarkets agreed to hand back cash saved from business rates holidays, increased pay rates, paid bonuses and agreed to Boxing Day holidays before making the dividend payments.
Clodagh Moriarty, retail and digital director at Sainsbury’s, said: “In the last 12 months our frontline colleagues have shown outstanding commitment to our customers.
“In recognition of everything they have achieved, we are giving them a pay rise, plus an additional one-off payment.”
The pay rise was criticised by unions as not going far enough and encouraged bosses to match the £10-an-hour salary offered by Morrisons.
“Sainsbury’s has decided to repay its workforce’s loyalty and hard work by offering them a pathetic 20p increase to £9.50 an hour, which is put to shame by Morrisons’ commitment to pay all its workers £10 an hour.”
Unions said the deal falls short of the £10-an-hour pay now offered by Morrisons and called on Sainsbury’s to match its rival.
Dave Gill, Usdaw national officer, said: “Over the last year, Sainsbury’s staff have worked throughout the pandemic to keep the nation fed, facing increased abuse from customers and worrying about catching Covid-19.
“As key workers delivering an essential service, they deserve much better than the additional 20p per hour on offer, particularly after only receiving a 1.3% increase last year.
“The deal offers a higher increase for Argos workers of around 6%, which is welcome, but they also deserve better.
“Most Argos staff also worked throughout the pandemic, with many being redeployed into Sainsbury’s stores supporting the food retail side of the business.”
Ms Clarkson added that the one-off bonus could negatively affect other state benefits staff rely on, suggesting a bigger pay rise would be more beneficial to workers.
She said: “These bonuses will cause reductions and interruptions to payments of universal credit and working tax credits that many Sainsbury’s staff rely on.
“Instead of a PR-friendly plan to offer bonuses, Sainsbury’s should match Morrisons’ pledge and give staff the proper pay rise they deserve.”