Lidl matches Aldi pay rise amid tightening labour market

Supermarket group Lidl has pledged to match the pay rise for entry-level store assistants that was announced on Friday by its rival, Aldi, amid what industry bodies say is a tightening labour market in the grocery retail sector.

Aldi on Friday said it plans to increase the entry-level hourly rate for its store and warehouse workers by almost 2 per cent to €11.70. This matches the “living wage” that is promoted by the trade union and academic-backed body, the Living Wage Technical Group (LWTG).

"We are committed to offering the best pay and benefits in the industry, and will continue to do so," said Giles Hurley, managing director of Aldi Ireland.

The LWTG defines the living wage as the minimum hourly rate necessary for a worker on 39 hours per week to be able to afford a basic standard of living. The legal minimum wage is €9.55 per hour.

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The LWTG, whose members include, among others, representatives of Unite, Siptu and Social Justice Ireland, last summer recalculated the “living wage” upwards from €11.50.

Commitment

Aldi’s increase to the higher living wage, which it says is the first such commitment by a supermarket, will take effect February 1st.

Later on Friday, Lidl told The Irish Times that it, too, plans to raise its entry-level pay rate to €11.70 per hour, from March 1st, the beginning of its financial year.

“As the first nationwide retailer in Ireland to commit to the living wage of €11.50 in 2015, we also pledged to consistently review this rate to ensure our team are among the best paid in the industry,” said its head of human resources, Maeve McCleane.

“We are delighted to confirm that all entry level employees in stores and warehouses will receive the recommended increase to 11.70 per hour.”

The two German-owned rivals, which between them control close to a quarter of the intensely-competitive Irish grocery market, are renowned for having the best entry-level hourly pay rates in the industry.

Competitive packages

Both chains pay their store assistants up to €14 per hour, with generous packages for management. At Aldi, for example, assistant store managers earn between €41,000 and €50,750, with store managers on up to €81,500. Graduates who join Aldi’s area management programme start on €61,000 and earn up to €97,700 after four years, with a fully-expensed Audi A4.

Lidl has similarly competitive packages for senior staff.

Retail Ireland, a division of employers' lobby group Ibec, said paying the "living wage" suits some retailers but, for others, it was "unsustainable". Its director, Thomas Burke, said the living wage is not "a panacea, it's not a one-size fits all" solution for maintaining attractive working conditions.

He said that, due to the improving economy and a tightening labour market, many retailers had paid increases of between 2 and 3 per cent over the last year.

Neither Lidl nor Aldi are union houses.

Mandate, the retail trade union, said its members in supermarkets such as Tesco and Dunnes had secured pay rises, but are also covered by "banded hours" contracts to guarantee them hours each week.

“It’s not just all about the headline hourly rate,” said Mandate.

Tesco, for example, gave staff a 2 per cent increase last year and it says 50 per cent of staff work at least 30 hours per week.