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Sainsbury's raises staff pay and offers free food in £25m cost of living support

A member of staff works at a Sainsbury's supermarket
Employees at Sainsbury's and Argos will see their wages increase from £10 per hour to £10.25 per hour, and from £11.05 to £11.30 in London. Photo: Hannah McKay/Reuters (Hannah Mckay / reuters)

Sainsbury's (SBRY.L) has announced a £25m ($29m) cost of living support package to help staff with rising costs.

The UK’s second largest supermarket chain said £20m of the funding will go towards a pay rise for 127,000 workers, as well as free food.

From 16 October, employees at Sainsbury’s and Argos will see their wages increase from £10 per hour to £10.25 per hour, and from £11.05 to £11.30 in London.

The supermarket will give workers access to "basic food items" during their shifts from the first week of October until the end of December, as well as increased discounts within the stores.

“The free food will ensure that colleagues can have something to eat while they are at work and the longer and deeper discounts will help colleagues plan and manage their budgets through the autumn and in the run up to Christmas,” the company said.

Sainsbury's said the extra increase would not affect the timing of the next annual pay review, which will go ahead in the new financial year.

The move now brings the total investment into supporting workers to around £150m.

Simon Roberts, chief executive of Sainsbury’s said: “Every day, I am hearing from colleagues who are really feeling the pressures of the rising cost of living.

“That’s why we are doing everything we can to help our colleagues as they face rising bills and living costs this autumn by investing £25m into a package of support, including an early pay increase.

“This is the first time we have given two pay rises in the same year.”

Read more: Aldi overtakes Morrisons as UK’s fourth largest supermarket as food inflation soars

In January, the retailer increased basic hourly pay for workers from £9.50 to £10, meaning that frontline workers will have seen a 7.9% pay rise over the year.

Despite the rise, this is still lagging behind the rising cost of living, after the Office for National Statistics (ONS) recorded 10.1% inflation in the 12 months to July.

It comes a day after Sainsbury’s confirmed it would be closing stores on Monday 19 September due to the Queen’s funeral.

Separately on Tuesday, data from Kantar showed that food inflation hit a fresh record of 12.4%, adding £571 to the average annual grocery bill, which will go from £4,610 to £5,181.

Categories such as milk, butter and dog food are jumping up particularly fast at 31%, 25% and 29% respectively.

Watch: How does inflation affect interest rates?