Credit: Michael Ely/Geograph

Aldi offers staff £8.40 per hour - will rivals follow suit?

The cash-strapped giants are struggling to compete on PR as well as price.

by Jack Torrance
Last Updated: 26 Nov 2015

Anything Lidl does, Aldi is determined to do better. After the former announced plans to pay its staff at least £8.20 per hour, Aldi upped the ante today by offering its workers £8.40. 

That's a full £1.20 more than the government’s new National Living Wage, which is set to be introduced in April, and 55p more than the current ‘proper’ Living Wage. It's also substantially higher than the wages paid by most of Aldi’s major rivals, including Tesco (£7.20 per hour) and Sainsbury’s (£7.36). 

The move might seem at odds with Aldi's normal modus operandi of keeping costs to an absolute minimum, but it is, if nothing else, a great PR move. It will certainly heap pressure on the (more expensive) major chains to up their rates of pay.

‘Their bold move demonstrates that paying the Living Wage in retail is achievable, despite other major supermarket chains telling campaigners that higher wages for the lowest paid are simply not possible,’ said Sarah Vero, director of the Living Wage Foundation.

It’s not as simple as that, though. Part of the reason Aldi can afford to pay more is because it has fewer staff per store. According to MT’s back-of-a-napkin calculations, Aldi currently employs around 43 people per store, compared to 89 for Tesco and a whopping 134 for Sainsbury’s.

Obviously that’s not a straightforward indicator of how well-staffed each of their stores are – Tesco and Sainsbury’s have more very large supermarkets, for instance, and there is likely to be variations in typical hours worked per employee.

But a recent study by the consumer group Which? found that, while Aldi and fellow discounter Lidl did well in terms of overall customer satisfaction, their customer service and ‘store environment’ ratings lagged behind their larger rivals. It’s possible that's because staff, however well remunerated, are spread a bit too thin.

Aldi's page on the recruitment site Indeed has plenty of tales from staff unhappy with how hard they were being worked (though Sainsbury's and Tesco don't fare all that much better). 'You're treated like a POW,' said one particularly aggrieved worker, a little melodramatically.  

That’s not to say the discounters are pursuing a harmful strategy. If shoppers were more bothered about customer service than price then Aldi and Lidl wouldn’t be growing at double digits while Tesco et al. are stagnating.

But it’s not fair to portray the larger chains, which employ more than half a million staff between them, as villains. When their sales are flat and they are struggling to turn a profit, it's hard to see how Tesco and Sainsbury's could match Aldi's 'generosity' without putting a lot of people out of work.

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