Sainsbury’s has announced that it is increasing basic pay for its shopfloor staff. However, the retailer is also ending paid breaks, premium pay for Sundays and annual bonuses as part moves to simplify the business.

Sainsbury’s said it was spending £100m on improving pay and the vast majority of staff would see more in their pocket. It will boost its basic rate of pay by £1.20 an hour to £9.20, and £9.80 in London – well above the national living wage. Sainsbury’s said it will fund the increase through ongoing cost savings within the business.

The group said the move to increase staff pay significantly was part of proposals to simplify its operations, with a new contract being introduced for all 130,000 staff which it said will ensure “consistency and fairness” across all its stores, regardless of age or length of service.  A bonus usually paid in the spring will end, as will paid breaks.

The number of roles will also be cut from 22 to five – trading assistant, food services assistant, online assistant, general merchandise and clothing assistant, and services assistant.

Sainsbury’s said a small number of staff may be adversely affected by the changes and it will be making top-up payments for 18 months to ensure no-one earns less than they do today.

Consultation on the proposals begins today and will take place over the coming months. If the proposals are confirmed, staff will receive the new rate of pay from September 2018.

Sainsbury’s Retail and Operations Director, Simon Roberts, said: “The retail sector has never been more competitive and we know that our customers really value our colleagues and the excellent service they provide in our shops.

“Which is why we think it is so important to invest further in our colleagues so they feel rewarded and motivated to do the best possible job for our customers every day. We expect the best from our teams and that’s why we’re committing to a leading rate of pay. Great pay for great work.

“Together with our recent proposals to change our management structure in stores, we believe the proposed changes will set us up to run the best shops in the industry, delivering the best possible service for our customers.”