Aldi is about to award staff an inflation-busting pay rise. From February 1st pay for store staff will rise by just over 3%. Store employees hourly rate will rise to £9.40 from £9.10. Workers based at stores within the M25 will see their pay increase to £10.90

Long service is also to be rewarded with a national rate of £10.41 for those who have worked for the company for at least three years and £11.15 for colleagues in London.

It means that the German discounter’s hourly rate now surpasses that of its chief competitor Lidl who themselves announced a staff pay rise in November, taking the hourly rate up to £9.30 and £10.55 in London. Both retailers now pay well above the national minimum wage which is due to rise by 6.6% to £8.72 on April 1st.

The Aldi rise takes pay levels higher than the hourly rate suggested by the Living Wage Foundation to reflect actual living costs. This is currently set at £9.30 across the UK, rising to £10.75 in London. The charity which sets the voluntary pay measure now has more than 6000 employers accredited to its scheme, with increasing numbers in retail. Aldi are yet to join but the latest pay increase suggests they may soon be minded to do so. They point out that they are one of the few supermarkets to pay staff during breaks.

Chief Executive of Aldi UK Giles Hurley says the pay increase reflects the hard work and dedication of the company’s store employees. He believes that market-leading rates of pay are deserved for staff as a result of their efficiency and productivity.

The pay rise comes at a time when the store is embarking on a large scale expansion. Aldi, which currently has 874 stores aims to increase that number to 1000 by the end of 2020 and to 1200 by 2025. This year will be a big year for recruitment with more 3800 new store levels vacancies to be filled.

The pay rise reflects an increasingly buoyant recruitment situation across some sections of retail with companies now competing in terms of salary and associated benefits. A 7 million bonus to be shared by staff of the High Street baker’s Greggs was recently announced. Frasers Group head Mike Ashley, once Sports Direct, announced a proposed new bonus staff scheme in 2019, although the details are yet to be finalised.