Retail sector pay deals fell significantly in last year

Pay awards in the retail sector have tumbled to a median of just 1.2%, research published today has revealed.

The figure is down significantly from the 3% rise recorded in May 2009, the XpertHR research of 109 pay awards covering 1.3 million employees found.

The study also found that the increase was some way below the headline rate of inflation. Pay awards in the year to the end of May 2010 stood at 1.2% for retail employees but prices roses by 5.1% over the same period, mirroring what is happening with pay awards across many sectors of the economy.

Other findings showed that a quarter (24.8%) of awards did not involve a pay rise; half of pay awards are worth between nil and 2% with only a few worth more than 2.5%.

More than two-thirds (67.6%) of pay deals were worth less than was paid to the same group of employees a year ago.

However, the report suggested the forthcoming 2.2% rise in the adult minimum wage from October 2010 was likely to “result in an upward drift in pay levels in at least some parts of the sector.”

It added: “Any potential earnings growth in the near future is, however, likely to be modest, especially if the impact of the forthcoming VAT increase, or anticipated public sector jobs cuts, have a significant adverse impact on consumer spending.”

Contributing to the report, the British Retail Consortium said: “It is astounding that the Government would raise the minimum wage by 2.2% at a time when private sector wages are virtually flat, and companies across the country are still making tough choices to keep as many people in employment as possible.”

Sheila Attwood, XpertHR pay and benefits editor said: “Official figures point to an upturn in both retail spending and employment in the sector, raising the prospect of workers receiving a more significant pay rise next year.

“The 2.2% increase in the national minimum wage from October 2010 will provide a further boost to pay in the sector.”

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