Minimum rates of pay for retail assistants in 2022 were typically 9% higher when compared to 2021, according to the latest research on pay and conditions in retail by Incomes Data Research. The median minimum established rate for these workers last year was £9.71 – up from a median of £8.91 in 2021. This upward trend has been influenced by a larger proportion of higher-end pay awards worth 6% or more in the sector. Awards at this level accounted for more than a quarter (29%) of all pay increases in the retail sector in 2022, which is up from just 6% of awards the year before. A combination of factors has contributed to growing pressure on pay in the retail sector, including the rise in the National Living Wage (NLW), ongoing competition to attract staff, and efforts to support employees through the cost-of-living crisis.
Pay rates for retail assistants aged 23 and over are closely aligned to the National Living Wage, the highest (or ‘adult’) tier of the National Minimum Wage (NMW). Across the retail sector, at the median, the minimum established rate for these workers in 2022 was £9.71 – some 21p above the current NLW rate of £9.50. This is the first time that the median rate from our research has exceeded the statutory floor since it was introduced in 2016. The forthcoming increase of 92pph (or 9.7%) will bring the NLW rate to £10.42 from 1 April 2023. While this places significant upward pressure on pay among retailers, we have observed instances of employers bringing forward their annual pay review. For example, DIY chain Wickes confirmed that its April 2023 pay rise would take effect four months early in December 2022 to help employees manage the higher cost of living, bringing customer service assistant rates (dependent on age) up to £10.42 in line with next month’s NLW rate.
Growing recruitment and retention challenges across the sector also contributed to the upward pressure on pay last year. Some 81% of firms in our sample reported difficulties with recruiting staff in 2022, compared to 64% that experienced this in 2021. The proportion of employers facing difficulties with staff retention overall has risen slightly with 65% reporting problems, compared to three-fifths in our last study. The challenging labour market, coupled with high inflation, has contributed to some retailers’ decisions to award more than one pay rise in the same year. These moves have been part of a process whereby major retailers have effectively been leapfrogging each other’s pay rates, which has led to stiff competition in the sector, particularly among the largest employers in food retail.
Minimum rates of pay for established retail assistants were highest in food retail in 2022 where the median is £10.28 as a result of many large organisations in this area continuing to increase hourly rates for their store assistants to more than £10.00 an hour. Moves are already underway among supermarkets to boost pay above the £11.00 an hour mark. Aldi, Lidl and Sainsbury’s are now paying a basic minimum rate of £11.00 an hour, while Tesco and Asda are planning to implement rates of £11.02 and £11.11 from April and July respectively.
