German-owned discount supermarket Lidl GB has followed rivals in raising hourly pay rates for the second time this year as competition heats up to attract and retain staff in a tight labour market amid a cost-of-living crisis.
The retailer said on Thursday it would pay workers outside of London a minimum of £10.90 ($12.3) an hour, up from £10.10, and workers in London a minimum of £11.95, up from £11.30.
The increases, benefiting over 23,500 workers, will take effect on 1 October and cost Lidl GB £39.5 million.
It said the new pay rates represent an increase of 10% to 14.5% compared to this time last year. UK inflation in August was 9.9%.
Ryan McDonnell, CEO of Lidl GB commented, “We have introduced these rate increases to reflect the key role and tireless efforts of our incredible colleagues working in our 935 stores and 13 warehouses. The role that we as a discounter play in giving households access to good, affordable food cannot be underestimated, now more than ever.
"But the ongoing commitment and dedication of our colleagues in making it all possible for our customers cannot be underestimated either – our business simply would not run without them.”
With Britain's jobless rate at its lowest since 1974 the Bank of England is watching pay settlements closely as it mulls further rises in interest rates.
Lidl's move follows rises announced by Marks & Spencer on Wednesday and Sainsbury's last week.
News by Reuters, additional reporting by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.