Sainsbury’s saw a minority of shareholders revolt over staff pay at its AGM on Thursday morning, with nearly 17 per cent backing a resolution for the supermarket to gain Living Wage accreditation.
Some 16.7 per cent shareholders supported a resolution that urged the supermarket to become a Living Wage accredited employer.
The resolution required 75 per cent of votes to pass.
CEO Simon Roberts told attendees in Holborn, central London that the grocer prided itself on being “industry leaders on colleague pay.”
The supermarket said its staff had seen a 25 per cent increase in pay over the past five years and it had made changes such as removing age-related pay and moving forward the timing of an annual increase.
Share Action, which organised the resolution, have argued Sainsbury’s must commit to ensuring pay “will continue to increase in line with the cost of living in future years.”
Accreditation by the Living Wage Foundation would “remove this uncertainty,” the body said.
However, Sainsbury’s said it wants to “have the flexibility to pay the right rate of pay and benefits to our colleagues,” considering the “specific circumstances” of a particular time.
Investors including Coutts & Co and Aviva had planned to support the resolution while asset manager Schroders said it would vote against the resolution.
Speaking on Thursday, chair Martin Scicluna said while the supermarket would consider paying the living wage each year, it fundamentally believed it must “preserve the right to make independent biz decisions.”
Share Action also wants to see the supermarket commit to pay increases for third-party staff, including cleaners and security guards, and for wages in outer London to match the real Living Wage for the area.
The supermarket announced new wages for directly employed workers earlier this year, with a basic hourly pay of at least £10 per hour.
The new pay increase matched the real Living Wage for staff in inner London and those working outside the city.
Chair Scicluna said the supermarket was working on three per cent margins, making three pence for every pound, with other employers working with wider margins.
In response to a question about the vast disparity between pay between the highest and lowest paid, Scicluna said such ratios were “not unusual” in retail, with rivals having higher ratios.
The firm wanted to “reward and incentivise” management, yet did not do it “blindly,” he added.
Sainsbury’s could also not ignore the market when it came to high wages for its top team, the chair said.
Regarding the response to the cost of living crisis, Roberts said there had been “signs of customer behaviour changing, with some switching to economy and own label products.
However, sales of premium products remained “resilient”, as shoppers were keen to “treat themselves” despite the tough economic conditions.
Big ticket items in general merchandise would continue to see a “more challenging outlook,” Roberts added.