HIGH STREET RETAILERS ARE FACING SHAREHOLDER PRESSURE TO PAY STAFF LIVING WAGE

Major high street retailers are facing pressure from shareholder activists to pay fair wages amid the cost-of-living crisis.

ShareAction, the responsible investment advocacy group, is gearing up to confront the boards of Marks & Spencer, JD Sports, and Sainsbury's at their upcoming annual general meetings (AGMs) this week over the issue of low pay. The campaigners are set to warn about how low pay can damage brands and lead to falls in revenue.

As of April, the Government's official living wage stands at £11.44 per hour, but the Living Wage Foundation argues that a "real Living Wage" should be £12 nationwide and £13.15 in London, which companies can choose to adopt. Marks & Spencer is will be quizzed at its AGM on Tuesday regarding its reluctance to guarantee the real Living Wage for its third-party contracted workforce, including cleaners and security personnel, despite posting profits of £380millionl last year.

ShareAction is also pushing for the retail giant to pledge a long-term commitment to paying all employees the real Living Wage. JD Sports and Sainsbury's will face similar scrutiny from the activists at their AGMs on Thursday, with calls to ensure all workers receive are paid the higher amount.

Additionally, ShareAction will press Sainsbury's, which generated profit of £277million in the previous fiscal year, to pay its contracted staff, who maintain store cleanliness and safety, the real Living Wage. Simon Roberts, the chief executive of Sainsbury's, is in line for a nearly £5million pay packet this year, 212 times more than the average employee's earnings, as reported by the High Pay Centre.

Dan Howard from ShareAction commented: "Inadequate pay is a widespread issue in the retail sector, leaving many workers struggling to make ends meet, and with all sorts of negative knock on effects on businesses from high turnover rates to low productivity. It's in these businesses' interests to pay their staff a real Living Wage, which allows workers to afford the basic goods and services they need, from housing to food to bills."

Howard also stressed the importance of companies becoming accredited as Living Wage Employers, committing to paying all their staff, including third-party contractors, a real Living Wage now and in the future. ShareAction has been active at shareholder meetings of other big retail players such as Tesco, Greggs, Next, and B&Q's parent company Kingfisher, pushing its campaign for a Living Wage for high street employees.

Catherine Howarth, chief executive at ShareAction, stated: "The cost-of-living crisis has made it clear that pay inequality and in-work poverty are a blight on our society and urgently need tackling. Businesses paying the real Living Wage is vital to protect living standards for low-paid workers and serves the long-term interests of businesses, investors, and society."

"This is why we are calling on investors to use their influence as shareholders to steward companies in the right direction and ensure all workers receive the real Living Wage."

Sainsbury's has come forward stating it pays its colleagues the real Living Wage across the board, and that a large majority of third-party contractors working in various capacities within the company are already earning at or above this wage.

An M&S spokesperson said: "This year we made our biggest ever investment in retail pay £89million - to at least £12 per hour, in line with the real Living Wage, as well as investing in improved maternity and paternity policies as part of our broader reward package. Since March 2022 we have increased our standard hourly rate by more than 26% significantly ahead of inflation."

The spokesperson added: "Our third-party contractors, as separate businesses, set their rates independently but they must comply with our ethical standards. We continue to have constructive, active dialogue with ShareAction and wider stakeholders, most importantly our colleague representative network BIG, with the feedback we are given informing the decisions we make on pay."

2024-07-02T09:42:02Z dg43tfdfdgfd