Marks & Spencer will invest £95 million into increasing pay for its retail staff, despite facing “cost pressures” from the government.
Starting from 1 April, the pay rate for UK Customer Assistants at Marks & Spencer will increase from £12 to £12.60 per hour, reflecting a 5% rise year on year and a 26% increase since 2022.
The new pay rate of £12.60 per hour is higher than the government’s national living wage of £12.21 per hour.
“Following the Government’s recent increases in tax and national insurance contributions, it’s no secret that M&S and indeed the entire retail sector has some significant cost headwinds to face into in the new financial year,” M&S Chief executive Stuart Machin said.
“However, I have always believed that we should not allow these headwinds to impact our hourly paid colleagues, which is why today, for the third year in a row, we are making a record investment in our retail pay offer.
“This means we have now invested almost £300m in our pay over the past three years, well above the rate of inflation, in addition to our market-leading discount and pension offer for colleagues,” Machin added.
Before this announcement, Marks & Spencer estimated that the increase in employers’ national insurance (NICs) would add £120 million to its wage bill, a figure that is expected to rise further.
The change to NICs, especially the lower threshold, came as a shock to businesses in labor-intensive, part-time reliant sectors like hospitality and retail.
Research from UKHospitality has found that changes to national insurance contributions (NICs) will add £2,500 to the cost of employing the average worker.
Earlier this year, M&S was part of a group of major retailers that warned the Treasury about the risk of hundreds of thousands of job losses in the retail sector due to unsustainable cost hikes.
At the time, Machin stated that “retail is being raided like a piggy bank and it’s unacceptable.”
“The blunt truth is… the budget means UK retail will get smaller,” Machin wrote in The Times, adding that while Reeves’ long-term growth ambitions are welcome “action [needs to be] taken to encourage growth today”.