Sainsbury's today announced that it is raising its basic pay to £9.20 an hour, ahead of the government's increase in the national living wage next month, but staff benefits will be eroded.
The supermarket said the pay rise was part of its plans to invest £100m in staff this year. Staff will be moving up from a basic pay rate of £8.00 per hour.
Unite union said the supermarket was "robbing Peter to pay Paul" because Sainsbury's is also ending its premium pay for Sunday working when it moves colleagues to new contracts. The supermarket is also removing bonuses and paid breaks.
Next month, the government will increase the national living wage from £7.50 to £7.83 per hour, an increase of more than four per cent. While many retailers pay more than the national living wage, the increase in the base rate will feed through to shop staff as firms will need to maintain their pay differentials.
Simon Roberts, retail and operations director at Sainsbury's, said: "The retail sector has never been more competitive and we know that our customers really value our colleagues and the excellent service they provide in our shops.
"Which is why we think it is so important to invest further in our colleagues, so they feel rewarded and motivated to do the best possible job for our customers every day."
The announcement comes after Sainsbury's said it was cutting thousands of staff as it trimmed the number of middle-managers working across its stores.
“Our members will have to make a number of sacrifices to secure this rate of pay which includes the removal of paid breaks and Sunday premium pay, as well as a number of changes to the attendance policy," said Unite national officer Bev Clarkson.
“Unite believes these ‘strings’ will offset any rise in basic pay. We will be holding a consultative ballot of our members at the end of the month."