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  1. Business
28 March 2022

In the cost of living crisis, supermarket workers are once more on the front line

Shareholder action today highlights the precarious finances of a million low-income workers who are essential to food supply.

By Will Dunn

After Rishi Sunak delivered his Spring Statement to the House of Commons last week, he headed over to Sainsbury’s in New Cross, south-east London, for a photo shoot in which he was shown filling up an ordinary-looking car, enjoying the 5p cut in fuel duty he’d just introduced. Because the Chancellor of the Exchequer doesn’t travel in an ordinary-looking car, a small hatchback was borrowed for this purpose from a Sainsbury’s worker, who – government sources reassured the public – got to keep the petrol.

In doing so they may well have doubled their pay for that day. The Kia Rio’s 45-litre tank costs, at the average petrol price for last week, £74.06 to fill from empty, while a Sainsbury’s worker in inner London has a daily take-home pay (at £11.05 an hour) of £70.02. But while one grateful supermarket worker enjoyed the unexpected largesse of Britain’s richest MP, a million supermarket workers across the UK were left wondering how they were going to cope, after he failed to produce any meaningful support to address a period of stagflation that will have the most serious impact on living standards for at least 50 years.

Sainsbury’s, which has forecast a profit of at least £660m for the current financial year, has been targeted this morning by the social activist investor group ShareAction. The group has filed a shareholder resolution signed by some of the UK’s biggest institutional investors – including Legal & General, HSBC Asset Management and the government-established pension scheme, Nest – calling for the supermarket to become an accredited Living Wage employer.

None of the UK’s supermarkets has this accreditation, which requires employers to commit to paying the real Living Wage. While some – including Sainsbury’s – currently pay the real Living Wage, accreditation would commit them to lifting pay as the cost of living rises (the real Living Wage is calculated from the cost of living, whereas the government’s National Living Wage is based on median earnings).

It would also require them to pay this rate to everyone who works for them, including agency workers such as security guards and cleaners – a hidden workforce that doesn’t usually benefit from staff pay commitments. Supermarkets don’t disclose the numbers of agency staff they employ but the cheaper they are in comparison to the people on payroll, the more incentive they have to use them.

Supermarket workers are particularly exposed to rises in the cost of living because they typically work for less time: the average is 28 hours per week. In recent months distribution staff at Asda and Tesco have threatened strikes over pay, while Asda shop staff, who receive the lowest basic hourly rate of the big supermarkets, at £9.36 per hour (rising to £9.66 on April 1), have complained that they cannot afford to shop where they work.

In the first year of the pandemic, supermarkets experienced a dramatic increase in sales as a result of social distancing policies, but according to an Oxfam report, 98 per cent of the gains made by publicly listed retailers went to owners and shareholders. Shop staff, meanwhile, were around five times as likely to catch Covid and fatalities were significantly higher among retail staff than the general population.

Inflation, which now stands at 6.2 per cent (CPI) and is expected to average 7.4 per cent through 2022, could deal these workers another disproportionate blow. The food bank provider the Independent Food Aid Network has already reported a rise in supermarket workers seeking food aid, while the campaigns network Organise says one in three Sainsbury’s workers it surveyed “regularly worried about putting food and drink on the table”.

When Rishi Sunak gave his Spring Statement to the House of Commons last week, his colleagues roared with approval at his announcement of fiscal policy “that rewards work”. However, the problem in the UK is not unemployment (which remains historically low) but low pay. A report last year by the Institute for Public Policy Research found that most people in poverty live in working households, and the likelihood of someone from a working household being in poverty had risen by 32 per cent since 1996.

In March 2020, the government identified food and necessary goods workers as “key workers” needed to keep society functioning during the pandemic. Two months later the ONS found that these were the lowest paid of all key worker groups. We have already seen what happens when low pay and conditions lead to a sudden shortage of HGV drivers, taxis or care workers. When something similar happens in supermarkets, it should not come as a surprise.

[See also: It’s confirmed: meetings are a waste of time]

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