Lidl GB has joined rivals Aldi UK and Sainsbury’s in awarding store staff an above-inflation pay rise, adding to mounting pressure across Britain’s supermarket
sector to boost wages amid a tight labour market.
The discount grocer said on Friday that it will increase entry-level hourly pay for store workers from March 1, lifting the national rate from £13 to £13.45. The move represents a 3.5% rise since the last increase in September and a 5.5% increase over the past year. Employees in London will continue to receive higher pay rates.
Lidl, which employs around 35,000 people and has become Britain’s fastest-growing bricks-and-mortar grocery chain, said the pay rise will cost the business £29 million ($39.4 million). The retailer is owned by Germany’s Schwarz Group.
The announcement follows similar steps by major competitors. Aldi UK said last month that pay increases for more than 28,000 hourly paid staff had lifted annual wage growth to 4.7%. Sainsbury’s has also raised wages by 5%, taking cumulative pay growth for its workers to 42% over the past five years.
The wave of pay rises comes as the Bank of England keeps a close eye on wage settlements while weighing when to cut interest rates. Britain’s headline inflation rate climbed to 3.4% in December — the highest among the Group of Seven advanced economies — prompting policymakers to remain cautious. On Thursday, the central bank held its benchmark Bank Rate at 3.75%.
Further pressure on employers is coming from government policy. The UK’s main minimum wage is due to rise by 4.1% to £12.71 an hour in April, despite warnings from some businesses that higher labour costs could fuel price increases.
Survey data published this week showed British companies expect to raise pay by between 3% and 3.49% this year — a level that remains slightly above what some Bank of England officials consider consistent with returning inflation to the 2% target.
As supermarkets compete for staff and shoppers alike, the latest wage moves suggest the battle for workers may remain intense well into 2026. Photo by Peter Clarke at English Wikipedia.