Asda, which is part-owned by Blackburn’s billionaire Issa brothers, has today announced proposals for a £150 million investment in pay for retail staff.

The investment will see the supermarket giant become the highest paying UK grocery retailer, as it opens its landmark 1,000th UK store, it said.

Today’s announcement (Friday, March 1), will see an 8.4 per cent increase for hourly-paid store workers, with rates rising from £11.11 to £12.04 an hour from July 1.

Rates for inside the M25 will rise to £13.21.

This follows a 10 per cent increase for hourly-paid retail roles during 2023, and a 28 per cent total increase in retail pay since the acquisition of Asda by the Issa brothers and partners TDR Capital completed in 2021 – with a total investment of almost £415m.

The move comes as Mohsin Issa announced he will be taking a back seat in the running of Asda and appointing a chief executive, while brother, Zuber, focuses on the brothers’ petrol station empire.

The new proposed rates of pay, which will exceed the government’s National Living Wage and the current Real Living Wage and London Living Wage rates recommended by the Living Wage Foundation, are set to apply to colleagues in Asda retail and in Asda Express, subject to ballot.

Usdaw, the trade union that negotiates with Asda on retail pay in Northern Ireland and in Asda Express, is recommending members accept the rates in a ballot that closes on March 15.

The outcome of the ballot, together with confirmation of the pay rate increase for staff who have joined Asda from former EG Group sites, will be confirmed on March 18.

The supermarket’s investment is set to boost hourly pay rates for more than 120,000 workers and coincides with the opening of Asda’s 1,000th store – Asda Express in Stevenage.

The company said this marks a significant milestone in its journey towards becoming the UK’s second largest grocery retailer, through a focus on convenience complementing its existing store estate.

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The announcement comes as the government is set to increase the national living wage for workers aged 21 and over to £11.44 an hour from April, up from £10.42.

Mohsin Issa, Asda’s co-owner, said: “This record investment will see Asda become the highest paying grocery retailer in the UK, recognising the hard work of our store colleagues in serving customers every day.

“We want to be a company that people are proud to work for, which is why we are proposing increasing pay for retail and Express colleagues by more than 8 per cent this year.

“As we celebrate our 1,000th store opening, I want to thank all our colleagues for their commitment and dedication in bringing Asda’s great value fuel and groceries to more communities.”

Hayley Tatum, chief people and corporate affairs officer at Asda, said: “Asda’s continued investment in our people is reflective of the hard work and commitment of our colleagues in serving two customers every day.

“Asda’s proposed new rates of pay not only exceed the current Real Living Wage but would make us the highest paying grocery retailer in the UK.

“As we celebrate the landmark opening of Asda’s 1,000th store, we are proud to announce this record investment in our colleagues.”

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Jayne Allport, Usdaw national officer, said: “We are pleased to have negotiated a pay increase to £12.04, which takes the basic hourly rate above the real Living Wage and meets our demands of at least £12 per hour.

“This offer from the company will now go to a ballot of Usdaw members covered by our agreements in Northern Ireland and Asda Express, Usdaw is recommending that they accept.

"Retail staff are key workers in our communities, ensuring that the nation is fed; they deserve our respect and one of the best ways of showing that is with decent pay, particularly in a cost-of-living crisis.”