Investors have urged Sainsbury’s to pay the ‘real’ Living Wage to all workers, stating that the supermarket has ‘no excuse’ not to take action on wages as living costs soar.
Investment NGO ShareAction has brought together a coalition of shareholders to file a resolution at its annual general meeting, which calls for the UK’s second largest supermarket chain to increase wages further.
It is believed to be the first shareholder resolution asking for a listed firm to seek accreditation from the Living Wage Foundation. Accredited employers must pay staff at least £9.90, or £11.05 an hour in London.
The coalition includes the UK’s largest asset manager, Legal and General Investment Management; the largest workplace pension provider, Nest; as well as 108 individual shareholders and Labour MPs Siobhain McDonagh and Helen Hayes.
Martin Buttle, head of good work at ShareAction said: “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. We hope this resolution will catalyse long overdue change.
“The directors of all supermarkets that aren’t accredited as Living Wage employers should be asking themselves why not and taking steps to put things right by their workforce before their investors force the issue.”
The directors of all supermarkets that aren’t accredited as Living Wage employers should be asking themselves why not and taking steps to put things right by their workforce before their investors force the issue. ” – Martin Buttle, ShareAction
The group is concerned about the impact rising inflation and sluggish wage growth will have on the real household income of supermarket employees.
In January, Sainsbury’s announced new pay rates for its directly employed staff, with basic hourly pay of at least £10 an hour. However, its rate of £10.50 for workers in outer London is considerably lower than the real Living Wage for that region.
The group has also criticised Sainsbury’s for not making any commitments relating to the pay of third-party staff, such as cleaners and security guards. It says that excluding third-party staff from pay uplifts “creates incentives for businesses to increase their use of outsourcing, reinforcing the growth of insecure work”.
Angeli Benham, senior global ESG manager at Legal & General Investment Management, said: “The cost of living crisis does not discriminate between those living in inner or outer London. It does however discriminate between those on incomes that can shoulder the additional financial burden and those on low incomes who cannot. Some working households that were previously teetering on the edge of poverty may now be pushed over the edge.
“Sainsbury’s is a reputable household name that LGIM’s clients have been invested in for decades… We have co-signed this shareholder resolution because we believe all employees, both direct and indirect, who are helping Sainsbury’s to be a sustainable, reputable and impactful business deserve to be paid the real Living Wage.”
Cost of living
The Independent Food Aid Network reported an increase in supermarket workers using their foodbanks over the course of the pandemic, while research conducted by Organise found that one in three Sainsbury’s workers regularly worried about putting food on the table.
ShareAction indicated that Sainsbury’s can afford to pay the ‘real’ Living Wage as it reported expected profits of at least £720m, while its CEO took home £1,319,000 last year.
Siobhain McDonagh, Labour MP for Mitcham and Morden, said: “This will be my second time attending Sainsbury’s AGM, continuing to fight for fair pay for all of their longstanding and loyal staff. In the heart of a cost of living crisis, it has never been more important for Sainsbury’s to pay all of their colleagues fairly – and given that they made underlying profits of £720m in the last year they can have no excuse.”
A Sainsbury’s spokesperson said that it had received positive feedback from employees since its latest pay review announcement and noted it pays more than some of its competitors.
The spokesperson said: “In recognition of the extraordinary work our 189,000 colleagues do for our customers, this month we increased our basic hourly rate of pay for all store colleagues by 5.3% from £9.50 to our new rate of pay of £10 an hour. This has increased from £10.10 to £11.05 for colleagues in inner London and from £9.75 to £10.50 in outer London.
“Sainsbury’s hourly colleague pay has increased by 25% over the past five years and since Sainsbury’s acquired Argos we have increased Argos colleague pay by 39%. Our competitive pay rates are in addition to our colleague discount programme, matching pension scheme and recently enhanced Family Leave Policy.
“As we balance the needs of all our stakeholders, particularly in the light of the current cost of living challenges that many people in the UK face, it is vital that we not only pay our colleagues fairly but that we are able to invest significantly to offer customers great value.”