Aldi ups wages twice in months as it battles rivals and tight labour market

Aldi’s latest announcement that store staff will see a second pay rise in about two months underscores fierce competition for labour and tight supply in grocery retail. With hourly pay now at least £13.50 outside London, the discounter is not just responding to statutory minimum wage increases but trying to attract and retain workers in a market where demand for labour outstrips supply, pushing up equilibrium wages. This strategic bump aims to reduce turnover costs, challenge rivals like Lidl on pay differentials and defend market share in an oligopolistic supermarket sector that’s still hiring hard even amid broader rising unemployment.

Aldi to raise wages for second time this year - BBC News

1. Explain why the wage paid by Aldi in London is higher than elsewhere in the UK.

2. Discuss why wages have been rising for supermarkets workers. Use a labour market diagram in your answer.

3. Discuss the impact of National Minimum Wage (NMW) increases on supermarket costs.