IDR | 01 Apr 2019

Strength of supermarket pay leads the way in the retail sector | Press

Supermarket workers stand to earn the best rates of pay on offer in retail, according to the latest report on pay and conditions in retail by Incomes Data Research (IDR). This research has found that median minimum hourly pay rates within the food retail sub-sector are £8.70 – some 87p (11%) higher than the median in retail catering and 81p (10.2%) higher than in the non-food retail sub-sector, where median rates for retail assistants are level with, or slightly above, the National Living Wage rate of £7.83 for staff aged 25 and over.

“In the coming year, the main upward pressure on pay will be the National Living Wage, which rose by 4.9% on 1 April 2019. It will be interesting to see how retailers respond to this increase”, commented Zoe Woolacott from IDR.

The report also examines pay awards across the retail sector and finds that there was a positive shift in the number of higher-end pay awards in 2018. Nearly a quarter of all retail pay awards were worth 4% or more, compared with a tenth of awards across the economy as a whole. However, while many front-line staff have received above-inflation increases, the impact of difficult trading conditions in parts of the retail sector is affecting pay for some employees in more senior positions. For example, at a number of large non-food retailers within the sample, higher-end rises for hourly-paid staff have been offset to an extent by pay freezes for management employees.

The research also reflects on the state of recruitment and retention across the sector. Many retailers found that the ability to recruit new workers had improved compared with the previous year, but the picture varies within the sector. While over two-thirds of non-food retailers said that they were not experiencing any problems with recruitment, half of food retailers reported that they are facing problems in particular locations or during peak ‘seasonal’ periods. Retaining staff has been difficult for nearly three-fifths of respondents overall.

“The difficulties in staff retention that many retailers say they are experiencing could exert further upward pressure on pay. Such pressures might be exacerbated by the potential negative impact of Brexit on the supply of labour”, commented Zoe Woolacott.

Conversely, downward pressures on pay may arise if consumer demand continues to weaken, as was the case in the final months of 2018. Competition from online retailers, meanwhile, is adversely affecting some sub-sectors and is perhaps most acute in parts of non-food retail.

The report also found that:

The typical location premium paid to staff working in inner London relative to their colleagues outside the capital is now £1.07 an hour

Young workers aged between 16 and 20 typically earn more than the National Minimum Wage set for their age category. By contrast, workers in the 21-24 age category are more likely to be paid the same as the current statutory minimum for this age band.

Staff discounts are the most common benefit offered by retailers

For any queries relating to this research, please contact Zoe Woolacott on 01702 669549 or at zoewoolacott@incomesdataresearch.co.uk

Notes for editors

The full report, titled Pay and Conditions in Retail 2019, is based on research conducted by Incomes Data Research during 2018. It includes information from 45 major firms across the retail and hospitality sectors in the UK, together employing a combined workforce of nearly 1.3 million. The report contains detailed findings of pay and conditions in retail as well as information on pay levels for store staff, team leaders and managers. The report examines recruitment and retention issues, the impact of the NLW, pay rises, staff benefits and also contains a directory of pay structures at named organisations.