Sainsbury’s is to raise staff wages by 5% after cheering its “biggest ever” Christmas, boosted by soaring demand for party food and bottles of fizz, alongside a rise in clothing sales.
As a result, the supermarket told shareholders it is on track to increase its profits for the year, in line with previous targets.
It came as Sainsbury’s said it will hand staff an inflation-busting 5% pay increase in 2025 to help workers through a “particularly tough cost inflation environment”.
The increase, which will affect 118,000 hourly-paid workers, will see the minimum annual pay for a full-time worker outside London increase from £22,882 to £24,026 by August.
Sainsbury’s and Argos workers will see hourly pay increase from £12 to £12.45 in March, before rising again to £12.60 in August.
Workers in London will see pay increase from £13.15 to £13.70 in March, before lifting to £13.85 in August.
It comes ahead of the Government’s planned increase in the national minimum wage in April, which will rise by 6.7% to a minimum of £12.21 per hour for workers over 21 years of age.
The new pay deal came as Sainsbury’s reported an increase in sales over the latest quarter. The retail giant said overall group sales, excluding fuel, were up 2.7% for the 16 weeks to 4 January 2025, driven by strong momentum in its grocery business.
Grocery sales rose 4.1%, boosted by a nearly 40% rise in sales of party food, helping to offset a decrease in sales from Argos.
General merchandise and clothing sales increased by 3.4%, reflecting significant improvements in range and availability.
The company said it is on track to meet its profit guidance for the year as a result, telling shareholders its retail underlying operating profits are likely to be towards the middle of its £1.01 billion to £1.06 billion range.
Simon Roberts, CEO of Sainsbury’s, said: “Driven by our leading combination of quality, value and service, we have achieved seven consecutive quarters of volume performance ahead of the market and further accelerated our two-year volume growth.
“The strength of our customer service and operational performance stood us apart in delivering our biggest ever Christmas. Customers shopped later than ever and we achieved our highest ever sales in the final days before Christmas.”
