Lidl’s pay increase should play well with consumers

November 08, 2017, 10:08 AM GMT+0

Earlier this week Lidl announced that it is boosting hourly wages for its 16,000 employees and plans to open up one new store every week as it cements its place as one of the big-hitters in the UK grocery sector.

The retailer is boosting its hourly rate for staff from £9.75 to £10.20 an hour for all its employees within the M25 and from £8.45 to £8.75 an hour for those outside London.

It is not the first time that Lidl has generated positive headlines about its treatment of staff. Two years ago when it committed itself to pay above the Living Wage, its Buzz score (which measures whether someone has heard something positive or negative about the brand) rose notably in the subsequent days. It increased from +16.3 to +25.2 and pushed it – at least temporarily – to the top of our overall Buzz rankings list.

The announcement also had an impact on its Reputation score (whether people would be proud or embarrassed to work for the brand). Our data shows that when it announced its wage policy in 2015 its score was -3.7, but it has improved notably over the past two years and now stands at -0.7 – meaning as almost as many people now would be proud to work for the brand as would be embarrassed.

All of this has helped the retailer in its overall repositioning aims – from a budget discounter to a supermarket that can compete with its more ‘upmarket rivals’ with all types of consumer.

YouGov Profiles data points to why its announcement this week should play well with consumers. Looking specifically at Lidl’s current customers, 20% say that the minimum wage issue is a top issue for them, compared to 18% of the public.

What’s more, 35% of its customers say the current minimum wage is far too low, with a further 34% believing it to be slightly too low. This compares to the 22% that believe it is at the right level, and 3% that say it is too high.

With the crucial Christmas period ahead, Lidl may well have differentiated themselves in the minds of consumers, at a time when many companies are tightening their belts.

This article originally appeared in City A.M.

Image: Getty