Marks & Spencer has announced a 5% pay rise for approximately 50,000 retail employees, effective from April 1. The company is set to invest £95 million in this pay increase, marking a significant move as the national living wage rises in the UK.
According to The Independent, this decision comes at a time when the retailer is navigating increasing operational costs linked to recent government policy changes. While M&S aims to support its workforce, the broader implications of these rising expenses remain to be seen.
Pay Rise Details
The hourly rate for in-store customer assistants will increase from £12 to £12.60, while those working in London will see their pay rise from £13.15 to £13.85. For team support managers, the hourly rate will increase from £13.05 to £13.65, with London-based managers receiving an increase from £14.20 to £14.90.
Investment in Retail Workforce
Marks & Spencer’s chief executive, Stuart Machin, emphasised that despite facing significant cost pressures due to the government’s recent budget changes, the company remains committed to investing in its employees.
Over the past three years, M&S has invested nearly £300 million in pay increases, outpacing inflation rates. Machin commented,
Following the Government’s recent increases in tax and national insurance contributions, it’s no secret that M&S and indeed the entire retail sector has some significant cost headwinds to face into in the new financial year.
This reflects the challenges the company faces, especially with a £120 million additional cost burden this year due to the rise in the national living wage and national insurance contributions.
Impact of Government Changes
Machin acknowledged that the business is facing significant cost pressures, particularly from an increase in national insurance contributions and the national minimum wage rise, which will cost M&S an additional £120 million.
The company expects £60 million of this to come from the rise in national insurance contributions and another £60 million from the 6.7% increase in the national minimum wage. However, M&S has committed to shielding its customers from these rising costs by avoiding price increases.
Industry-Wide Trend
M&S’s move follows similar actions by other retailers like Sainsbury’s and Lidl, which have also raised wages for their retail workers. These pay hikes are seen as a response to both the increasing cost of living and the government’s wage adjustments.
In addition, M&S has been one of the winners of recent consumer spending trends, with £962 million spent on Valentine’s Day, a 10.8% increase compared to last year.
In addition to the pay rise, M&S staff will continue to receive benefits such as a market-leading 20% colleague discount, which can be combined with other offers to provide a total potential hourly value of up to £15.40.
