National Living Wage: Lidl and Morrisons have boosted perception by adopting salary rises ahead of time

 
Catherine Neilan
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Brands can gain goodwill by committing to more than the minimum (Source: Getty)

From a reluctant starting point, British retailers are now falling over themselves to make the most of Living Wage goodwill, announcing wage rises ahead of next year's obligatory rise.

Initially there was much gnashing of teeth over George Osborne's ruling that firms must pay staff above the £7.20 minimum for over-25s from April.

Wetherspoon's founder Tim Martin claimed it would have an adverse impact on pubs and former Sainsbury's boss Justin King said it would “destroy jobs”, while Costa Coffee parent company Whitbread warned it would lead to price rises for consumers.

Oliver Bonas was the first UK high street chain to commit to paying above the odds, raising the hourly wages to £7.85 from 1 September.

Plenty of others have followed suit, including Lidl and Morrisons.

All businesses will eventually have to pay it. But as this article pointed out at the start of September, time is running out for those hoping to reap good publicity from going ahead of time. So which brands are Living Wage winners?

In the week following Lidl’s announcement, the budget grocer's YouGov Buzz score improved dramatically to 30 per cent, “pushing it to the top of our overall Buzz rankings list – albeit temporarily”, the pollster said.

At Morrisons, a similar rise has been noted.

Sarah Murphy, director of YouGov BrandIndex, said: “One factor company bosses will be considering is whether it is better to improve their public perception by paying increased wages, and hope to win custom on the back of a reputational surge, or should they keep wages at a lower level so that prices and income aren’t affected?

“Our data shows that both Morrisons and Lidl have had an upturn in perception following their wage increase announcements. However, the question remains, will a move which will undoubtedly win public favour actually lead to an upturn in sales which endures over a long period of time?

"How rival retailers will react to these developments is also crucial to the future industry landscape, and the ongoing battle for increased market share.”

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