British clothing and food retailer Marks & Spencer said it would give around 40,000 store workers a 10.1% pay increase from 1 April, a move that reflects the rise in the government-mandated minimum wage.
M&S said customer assistants will see their pay rise from £10.90 ($13.83) an hour to £12 an hour - ahead of the government's national living wage, which will increase by 9.8% to £11.44 an hour, taking effect from April.
Pay Rise
The pay rise will be noted by the Bank of England, which is keeping a close eye on wage settlements as it assesses the direction of interest rates. It fears rapid wage growth could add more inflationary pressure across the economy.
Worker wages in Britain have only recently begun outpacing inflation, which held steady at 4% in January, still double the central bank's target of 2%.
M&S said customer assistants working in London will see their pay rise from £12.05 to £13.15 an hour.
So-called team support managers will see their hourly rate increase from £12.20 to £13.05, or from £13.35 to £14.20 in London.
Investment
M&S, which last month reported better-than-expected trading, said the investment in pay would cost it £89 million, while a further £5 million would be invested in improved maternity, paternity and adoption policies.
Stuart Machin, chief executive, said in a statement, “Our vision is to be the most trusted retailer – and that starts with being the most trusted employer. That’s why today we’re making our biggest ever investment in our retail pay offer to recognise our colleagues for the vital role they play each day.
“It means that since March 2022, we’ve invested more than £146 million in our retail pay offer and increased our standard hourly rate by more than 26%.”
Other retailers, including Sainsbury's, Amazon, Aldi, Lidl and Costa Coffee have also announced pay rises for 2024.
Analyst Comment
Commenting on the retailer's announcement, Danni Hewson, head of financial analysis at AJ Bell, said, “If any indication were needed that the UK jobs market is still looking pretty tight, the latest move on pay by Marks & Spencer should do the trick.
“The retailer’s decision to up its minimum pay above the compulsory National Living Wage that comes in from April will put other retailers under pressure to follow suit. But as with many employers it’s not just cold hard cash that’s being used to keep workers onside.
“It’s really encouraging to also see moves on both maternity and paternity pay, helping workers to deal with the shock of those first days after having a child.
“After months of dealing with the erosion of living standards inflation might be cooling, but people still feel poorer and the vast swathe of increases on things like council tax, broadband and car insurance will just make budgets even tighter.”
News by Reuters, additional reporting by ESM.
