Shareholders call on Sainsbury's to boost workers' pay

Shareholders including Legal & General Investment Management are calling on J Sainsbury to pay its workers higher wages.

The coalition of investors, which collectively manages £2.2 trillion, has filed a resolution calling on the supermarket chain to pay its workers the real living wage. As well as L&G, the UK’s largest asset manager, investors backing the proposal include Fidelity International, the National Employment Savings Trust, HSBC Asset Management and Dutch asset manager Actiam.

Sainsbury’s announced new pay rates in January, including a basic hourly rate of at least £10 per hour. The blue chip, which directly employs around 189,000 people, also matches the national living wage in inner London and outside the capital.

However, workers in outer London are paid £10.50 per hour, below the real living wage for that region, of £11.05 per hour, and there was no commitment regarding the pay of third party workers, such as cleaner and security guards.

Organised by campaigning group ShareAction, the resolution states: "To promote the long-term success of the company…the opportunities and risks associated with the cost of living for workers in the UK, and growing expectations that responsible businesses pay the real living wage, we as shareholders direct the company to accredit as a living wage employer by 2023."

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."

Angeli Benham, senior global ESG manage at L&G, 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."

Diandra Soobiah, head of responsible investment at Nest, said: "We want to see sustainable, long-term business decisions from the companies in our portfolio, such as a paying staff and their contractors a living wage."

British households are enduring a spiralling cost of living crisis, including soaring energy prices, record inflation and higher National Insurance contributions.

The national minimum wage is currently £8.36 per hour, and is applicable for workers aged between 21 and 23. From 23, workers are entitled to the national living wage, currently £8.91 an hour although it is due to rise to £9.50 from April.

The real living wage as advocated by ShareAction - £11.05 in London and £9.90 across the UK - is based on the cost of living, including housing and food. It is paid to everyone aged 18 and older.

The Living Wage Foundation, which manages the scheme, said nearly 9,000 businesses have so far agreed to pay the real living wage, including Nationwide, Google and a number of FTSE 100 companies.

A Sainsbury’s spokesperson said: "We pay more than many of our competitors and across the board colleague feedback has been positive to our pay review, which represents a £100m investment.

"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."

The resolution will be put before shareholders at the supermarket chain’s annual meeting in July.