Supermarket Morrisons has confirmed that it will not give its staff any significant pay rises this year following government tax increases on employers and the minimum wage uplift.
It cited Rachel Reeves’ October 2024 Budget and the decision to raise employers’ national insurance contributions and lower the threshold where they were paid, as one of the reasons why a pay increase would not take place.
Other reasons included a 6.7% rise in the living wage, which had cost an additional £200 million and limited profitability, as well as challenging conditions during the past year, such as competition from rival supermarkets and the impact of its cyber attack in late 2024.
Usdaw, the trade union that represents 45,000 Morrisons workers, has called a ballot for February and asked members to reject the current offer. If an agreement cannot be reached, it could result in industrial action.
A Morrisons spokesperson said: “In our recent full year results announcement, we highlighted that over the last 12 months we’ve faced a number of challenges, including an unexpected £200 million annualised increase in government costs, strong competition for sales and market share and the Blue Yonder cyber attack. On top of this, over the last financial year, we’ve invested over £100 million in staff hourly pay, and with the national living wage increase in April 2026, we will invest a further £70 million.
“Against this backdrop, we have to balance any further pay offers, with the overall performance, affordability and long-term stability of the business. We have not been able to present an offer to the Usdaw National Committee at this time and the union has confirmed [it] will now follow the process and proceed with a ballot of their membership. It is Morrisons’ clear position that we want to continue the dialogue with Usdaw.”
