Sainsbury’s said it would raise hourly pay in response to “particularly strong cost inflation” after retailers warned prices were likely to rise later this year.
The supermarket chain announced it would increase pay by 5%, from £12 an hour to £12.60 by August.
The latest official figures showed UK inflation rising at the fastest rate since March, driven by fuel and clothing.
But pressure group British Retail Consortium has warned that “there is little hope of prices rising” in stores as retailers deal with measures announced in the autumn budget, including an increase in insurance national for employers.
Chancellor Rachel Reeves said at the time that she had “decided that the right thing to do was to ask businesses and the richest in our country to pay a little more”.
In a trading update for the key Christmas period, Sainsbury’s said it expected annual profit to rise by around 7% to more than £1 billion.
For the holidays, comparable sales increased by 2.8%, driven by food.
