Lidl has become the latest supermarket to announce a pay rise for thousands of workers ahead of the increase to the minimum wage in April.
The German-owned discount chain says the pay rises, which include upping its entry-level hourly wage from £12.40 to £12.75, will affect about 28,000 employees.
The increase will take Lidl’s pay rates above planned rises that have been announced by Sainsbury’s and Aldi.
Many retailers have warned that the increase in the minimum wage this April, together with a rise in employers’ National Insurance Contributions (NICs), will lead to job losses, higher prices and store closures.
From April, the statutory National Living Wage for those aged 21 and over will rise from £11.44 an hour to £12.21.
Lidl employs more than 35,000 people across the UK in over 970 stores and 14 warehouses.
It said its new hourly pay rate can rise to £13.65 depending on length of service. In London, new starters will see their hourly rate rise to £14.00, which can increase to £14.35 over time.
This tops Aldi, which recently revealed it would pay all store assistants at least £12.71 an hour nationally, with higher rates in London.
Last month, Sainsbury’s said its wages would rise from £12 to £12.45 per hour in March before a further increase to £12.60, with higher rates for workers in London.
However, Sainsbury’s has also announced it will cut 3,000 jobs as it shuts down its remaining cafés and closes its patisserie and pizza counters.
While Sainsbury’s was already in the midst of a plan to save £1bn over the next few years, it is understood the rise in employers’ NICs announced in the Budget was also a factor in the restructuring plan.
The government has defended its tax rises as necessary to avoid cuts to public services, and the Treasury has said that exemptions for smaller businesses mean more than half of employers will either see a cut or no change in their NI bills.
But many retailers have criticised the move, and on Sunday the boss of M&S, Stuart Machin, said retailers were being “raided like a piggy bank” given the changes to various taxes.
Meanwhile, a survey of the jobs market by KPMG and the Recruitment and Employment Confederation (REC) has indicated that firms are holding back on recruiting new staff, as uncertainty over how the economy is performing is leading to a “wait and see” approach.
It found vacancy numbers have fallen sharply for permanent workers, with a steep drop observed in January.
“An autumn of fiscal gloom, difficulty navigating significant upcoming tax rises and little progress on the practicalities of a costly new approach to employment rights are all acting as brakes on progress,” said Neil Carberry, REC chief executive.