Dear Shareholder,
Re: ShareAction AGM resolution
I am writing to you to provide you with more context and information on our position on the Living Wage and the Board's recommendation to vote against the ShareAction resolution at the 2022 Annual General Meeting (AGM).
Paying our colleagues fairly
We have always believed in paying our colleagues fairly and see ourselves as industry leaders regarding colleague pay.
We have paid our colleagues above the government's National Living Wage for many years and over the last five years we have increased Sainsbury's colleague pay by 25% and, since acquiring Argos, we have increased Argos colleague pay by 39% and removed age-related pay.
Our pay rates are higher than many of our competitors and we were the first major retailer to pay our colleagues the Living Wage regardless of where they live in the
We are very aware that our colleagues and our customers are affected by increases to the cost of living. We therefore brought forward our annual pay review announcement to January and have made an investment of over
We also provide colleagues with a comprehensive benefits package including colleague discount of 10% off Sainsbury's and Argos and 15% off Sainsbury's for five days every payday. On average this benefit is worth around
Balancing the needs of all of our stakeholders
We spend almost
At the same time that we are increasing pay for colleagues, we are also trying to support our customers with the cost of living - and to grow our business - through investing in lower prices for customers. It is because of the huge emphasis that we have placed on improving value in our grocery offer that we are now growing our volume market share and winning new customers. We believe strongly that this is the right thing to do - and that, by investing for customers, we will continue to have a healthy and thriving business which can continue to support the 189,000 colleagues we employ.
We also have an obligation to you, our shareholders - to ensure that we are able to pay an affordable dividend every year.
Living Wage Accreditation
We are committed to paying our colleagues a fair wage and have a strong track record in doing so. We always consider the Living Wage alongside the National Living Wage when setting pay, but we do not wish to be formally accredited as a Living Wage employer. Accrediting as a Living Wage employer would mean that a third party - the
Accrediting as a Living Wage employer would also require us to have a plan in place to pay all of our suppliers the Living Wage. Across our
Thank you for your support
We hope that our track record demonstrates that we are committed to paying a fair wage to our colleagues, while also acting in the best interests of all our stakeholders. We will continue to monitor pay and are continually and actively looking at how we can support our colleagues and our customers with the current cost of living crisis.
Fundamentally, we believe it is right for the Company and our stakeholders to make independent decisions regarding pay and benefits, rather than have them determined by a separate external body. I hope the explanation in this letter helps you understand the Board's recommendation that you vote against the ShareAction resolution at the AGM.
I have included the resolution below for your consideration. We are at your disposal should you wish to discuss this.
Yours sincerely,
Chairman,
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