Sainsbury’s is giving its 137,000 shop staff a 4% pay rise, the highest increase for store employees in more than a decade and taking their hourly rate above the above the Government’s new living wage.

Following recent pressure from low pay campaigners, Sainsbury’s is increasing its standard rate of pay to £7.36 per hour, effective from this weekend. The move follows the government’s announcement last month that it plans to introduce a National Living Wage of £7.20 per hour for workers over the age of 25 by April 2016. However, Sainsbury’s said that it had decided not to differentiate between over and under 25s, so the new hourly rate of £7.36 will also apply to more than 40,000 staff under the age of 25.

The increase is still behind Tesco’s rate of £7.39 an hour, although Sainsbury’s stressed that it pays staff during their 30-minute breaks over an eight-hour shift, meaning they will be paid more over a working week. The retailer also pointed to additional benefits from its staff discount card and annual bonus scheme.

The surprise announcement comes at a difficult time for Sainsbury’s with it cutting costs across the business to enable it to invest in price reductions to compete with the discounters. However, its strategy appears to be paying off with market share data released earlier this week by Kantar Worldpanel showing that Sainsbury’s was the only one of the ‘big four’ grocers to see an increase (+0.1%) in sales during the 12 weeks ending 16 August.

Commenting on the pay rise, Sainsbury’s Chief Executive, Mike Coupe, said: “We’re delighted to announce a 4% pay increase for the colleagues who work in our stores across the country. We know what a difference they make to our customers each and every day and we’re totally committed to rewarding them well for the great service they provide. Their hard work, talent and dedication have been central to our success and will remain so in the future.”