Supermarket chain Asda has launched a consultation into lowering pay by about 5% for around 7,000 employees working just outside of London.
The consultation involves employees at 39 stores outside of the M25 and close to London, which have historically received a higher rate of pay because of their location. The consultation was launched to explore whether it is appropriate for staff at these stores to receive a higher rate of pay than the rest of the workforce.
According to Asda, it is the only supermarket that pays a location supplement of this kind. The business was bought in 2020 by Issa brothers and private equity firm TDR Capital, who have been looking to make savings across the organisation since taking control.
An Asda spokesperson said: “We are holding a collective consultation in a small number of stores outside the M25 where employees are currently paid a legacy location supplement of 60p per hour on top of their existing rate of £11 per hour. This supplement is out of line with the wider retail market and has created an anomaly where some Asda staff in stores that are close together are paid different rates.
“As part of this consultation, we are discussing a compensatory payment for staff in return for the removal of this location supplement, if the proposal goes ahead. These discussions are ongoing and no final decision has been taken.”
Last month, Asda gave all of its hourly paid shop floor workers a 10% pay rise to a minimum of £11 an hour, and pledged to increase pay to £11.10 an hour from July. Staff based in London and near to the capital are paid more as a result of the higher cost of living there compared with other parts of the country.