Soaring inflation and chronic staff shortages have forced Currys to become the latest major retailer to increase wages repeatedly, with workers offered a third pay rise in 13 months amid the cost of living crisis.
The electrical goods retailer said it was taking action to attract and retain staff, as companies across Britain struggle to find enough workers to fill a record number of job vacancies. With effect from 30 October, basic pay levels will rise by 3.5% to a minimum of £10.35 an hour, or £11.43 in London.
More than 10,000 workers are expected to benefit from the decision, which comes only a month after a previous rise came into effect. Taken together with a pay rise 13 months ago, the company said base hourly pay had gone up by 15.6% in just over a year.
Inflation rose above 10% earlier this year for the first time since 1982, as sky-high energy prices and the rising cost of a weekly shop puts intense pressure on workers and families. Currys’ decision comes after a review by a “cost of living group” set up by the retailer earlier this year, which is made up of senior staff from across the company.
The move by Currys to raise pay multiple times over a year follows similar decisions taken by other high street companies amid a battle to recruit workers, as soaring inflation and a smaller UK workforce after the Covid pandemic and Brexit take their toll.
The Bank of England governor, Andrew Bailey, has cautioned against large pay increases that could lead to inflation becoming “embedded” in the economy via a wage-price spiral, where higher wages and higher prices fuel each other.
However, unions have dismissed the argument as “a call for a national pay cut” while demanding bosses show restraint when it comes to executive pay and profit margins.
This month, Sainsbury’s said its 127,000 hourly paid workers would get a 25p-an-hour increase to £10.25 from October, its second pay rise in a year, with the rate for staff in London stores increasing from £11.05 to £11.30. Aldi, Tesco, Asda, Marks & Spencer and Pret a Manger have also increased their pay rates twice in a year.
While some employers are increasing pay, official figures show average wage growth is still falling short of inflation. Annual growth in regular pay was 5.5% in the three months to June – stronger than before the pandemic as companies battle for staff, but still significantly below inflation close to 10%.
Currys said “the current economic climate and feedback from colleagues” had led to the extra pay rise before its regular pay review in the spring, the results of which workers usually receive in August.
Alex Baldock, the group chief executive, said: “Every day I hear from colleagues who are feeling the impact of the rising cost of living and we’re determined to do what we can to help.”
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The business is offering a discount of between 3% and 5% every week on shopping at major grocers such as Asda, Morrisons and Sainsbury’s and free counselling on budgeting.
While the new pay rate is higher than the legal minimum set by the government – £9.50 an hour for workers aged 23 and over – it remains below the “real living wage” of £10.90 an hour across the UK and £11.95 in London used by 11,000 employers accredited by the Living Wage Foundation charity.
The foundation last week launched the annual increase in the living wage two months earlier than planned. It recommended its biggest single rise yet in recognition of the intense pressure on households from rocketing energy prices and the highest inflation rate in 40 years.
Last week Lidl and Marks & Spencer increased hourly pay in a sign of the pressure on companies to attract and retain staff. Lidl rose to the top of the retail pay league by taking entry-level hourly rates from £10.10 to £10.90 outside London and from £11.30 to £11.95 within the M25 that circles the capital. However, its pay for an eight-hour shift works out only 50p more than its rival Aldi, which pays for statutory breaks.