Business Maverick

Business Maverick

Sainsbury Investors Including HSBC Ask Grocer to Pay Living Wage

J Sainsbury Plc faces a demand from shareholders including HSBC Holdings Plc for the U.K.’s second-biggest grocer to pay the living wage to all its employees as record inflation grips the country.

A group of more than 100 investors has filed a resolution that the supermarket chain accredit itself with the Living Wage Foundation by the middle of next year. Shareholders will vote on the measure, the first of its kind in the U.K., in July, and it will need 75% approval to pass.A severe cost-of-living crisis is pinching consumer budgets as the prices of fuel, energy and food soar. U.K. supermarket employees are among those worst-affected, with two-fifths of them earning below the real living wage and an increasing number using food banks, according to the Independent Food Aid Network.

The Living Wage Foundation is an organization that has established a minimum hourly rate necessary for workers to afford housing, food and other basic needs. Currently the rate is 11.05 pounds ($15) in London and 9.90 pounds in the rest of the U.K. While half of the companies in the FTSE-100 are accredited by the group, none of the U.K. supermarket operators have signed up yet. It’s also not universally accepted as the minimum needed to live.

Sainsbury increased its basic hourly rate of pay from 9.50 pounds to 10 pounds this month meaning all store workers receive more than the legally mandated U.K. minimum wage. Staff working in inner London receive a higher rate of at least 11.05 pounds which is in line with the foundation’s “real living wage.” The retailer has increased pay 25% over the past five years and its hourly rate is currently more than rivals Tesco Plc and Asda.

Britain’s grocery industry is one of the most competitive in the world and is rapidly changing as more people shop online. Supermarkets are grappling with rising inflation while trying to keep prices low, invest in online and properly reward their staff.

No Commitments

Marks & Spencer Group Plc, Lidl and Aldi offer base rates about the living wage, ShareAction said. However, no supermarket operator has extended such commitments to third-party staff or pledged to keep paying that level in the future.

ShareAction, the responsible-investment group that organized the investor coalition, plans to write to all U.K. grocers with the same request and may file similar resolutions against them next year.

“Low-paid workers in the supermarket sector are being hit incredibly hard by rising living costs, yet we all owe them so much following the pandemic,” said Martin Buttle, an official at ShareAction. “We hope this resolution will catalyze long overdue change.”

Sainsbury, which employs 189,000 people, raised its profit forecast in January to at least 720 million pounds for the fiscal year that ends this month. Chief Executive Officer Simon Roberts was paid 1.32 million pounds in the prior year.

The shareholder group supporting the resolution also includes Legal & General Group Plc and Fidelity International.


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