Aldi Leads the Way on Pay: Is High Pay a Good Approach?

Aldi introduced a pay boost last week for its store assistants that will see their pay rise to at least £13.02 per hour nationwide, making it the first UK supermarket to pass the £13 mark. Within the M25, rates will start at £14.35, rising to £14.66 with length of service. All staff, regardless of age, will receive the same minimum rate – well above the new National Living Wage of £12.21.

This move follows Aldi’s policy of paid breaks, worth around £1,425 per year to the average store colleague, further strengthening its reputation as a leader on pay and conditions.

What are the benefits of Aldi’s approach? Are there downsides?

The benefits of Aldi’s approach

Higher pay can certainly deliver some clear business advantages. These include:

• Attracting and keeping staff – competitive pay helps reduce staff turnover, which saves on recruitment and training costs.
• Boosting productivity – well-rewarded employees are more motivated, which can translate into better customer service and improved store performance.
• Positive brand image – standing out as an employer that values its workforce helps Aldi with recruitment, customer loyalty, and wider reputation.
• Consistency for staff – paying the same rate regardless of age supports fairness and can create a stronger workplace culture.

The potential downsides

However, not every business can match Aldi’s scale and financial muscle. Many businesses do not have sufficient buying power or margins to be able to absorb increased pay rates.

As large employers raise pay, staff in smaller businesses may expect similar increases, putting those businesses under pressure to follow suit and increase wages.

What can you do?

Aldi’s move shows how pay can be used strategically, not just as a cost but as an investment in people and performance.

For smaller businesses, the lesson may be less about matching Aldi pound-for-pound and more about finding sustainable ways to reward staff – whether through competitive pay, fair contracts, or other benefits that support recruitment and retention.

See: https://www.gov.uk/government/news/supermarket-staff-receive-industry-leading-pay-rise-as-minister-celebrates-businesses-going-above-and-beyond-to-support-their-workers