Supermarket giant Asda faces a £100 million pay row after it emerged its staff are on worse contracts than those at Sainsbury’s.
The two grocers have announced plans to combine to create a £51 billion giant with 2,800 stores and 330,000 employees.
But The Mail on Sunday has learned that unions have held discussions with Asda staff over the pay disparity between the firms.
Sainsbury’s chief executive Mike Coupe received £3.4 million last year, a 45 per cent increase on the previous 12 months
Sainsbury’s is in the process of introducing a basic £9.20 hourly rate for staff this September. However, Asda staff have so far only been offered £8.50 on new contracts introduced last year.
It emerged on Friday that chief executive Mike Coupe received £3.4 million last year, a 45 per cent increase on the previous 12 months.
The big jump in his pay followed a gaffe on the day the plan to merge the two firms was announced, when he was filmed singing We’re In The Money from the musical 42nd Street. He later apologised.
Retail sources said many Asda staff have yet to be moved on to the new contracts and are still being paid £7.83, the minimum wage.
GMB national officer Gary Carter, who represents as many as half of the company’s employees, said: ‘Asda staff are well aware that Sainsbury’s employees are earning more, whether that is under the existing contracts or the new flexible contracts. They will be looking for the company to adopt best practice and for wages to increase.’
Carter said the union has raised concerns over the potential impact of the proposed merger on staff and plans further talks to address the pay gap. ‘This is very affordable. Both of these businesses are very profitable. If you want thriving local economies and good communities, you need to pay decent wages,’ he said.
The merged group’s annual profit is expected to be above £1 billion. He added that there were concerns among staff about the merger and ‘staff believe they should get something out of it too.’
Retail market sources estimated that increasing pay at Asda would cost at least £100 million.
It is understood that Asda staff also receive lower pension contributions than their Sainsbury’s counterparts and fewer holidays. Sainsbury’s new contracts mean many staff will get a pay rise, with London-based employees receiving £9.80 an hour. But it has also come under fire because an estimated 9,000 longer-serving staff will be left worse off under the new deal.
The plan to combine the two firms has raised fears that jobs could be lost and suppliers may see prices cut. Sainsbury’s and Asda insisted there are no plans to close stores. However, they may be forced to sell stores under a competition probe launched last month.
A spokesman for Asda said: ‘In the event of the proposed merger, Asda and Sainsbury’s contracts will remain separate and distinct, just as the businesses will. We will always have any discussions about our colleagues’ pay with them first.’