Morrisons in dispute with union over pay increases

Management at the retailer is currently engaged in a pay dispute with the union Usdaw concerning around 45,000 Morrisons workers it represents. The supermarket is believed to have declined to provide any increase beyond the national living wage. 

According to The Times, in a message sent to employees last week, Morrisons pointed to “a number of challenging conditions” experienced over the previous year, referencing intensified competition from rival supermarkets and the consequences of a cyberattack during the previous winter.

Morrisons highlighted the chancellor’s October 2024 Budget decision to raise employers’ national insurance contributions while lowering the payment threshold. These measures took effect in 2025 in tandem with a 6.7% rise in the living wage.

According to the retailer, the 2025 tax changes generated additional costs of £200m and constrained profitability.

The national living wage is scheduled to increase again this year, rising by 4.1% to £12.71 per hour from April. For younger workers, the national minimum wage will climb by 8.5% to £10.85.

A Morrisons spokesman said the supermarket had committed over £100m to hourly pay increases during the previous financial year, with this latest round of rises set to cost a further £70m.

“Against this backdrop, we have to balance any further pay offers with the overall performance, affordability and long-term stability of the business,” he told The Times. 

Usdaw has scheduled a ballot for next month, urging its members to reject what it characterises as the “zero offer” from Morrisons. Should an agreement ultimately prove unattainable, the dispute “may lead to industrial action”, according to a letter to union members obtained by The Sunday Times.

Usdaw national officer Darren Matthews said: “It is a sad day when one of the largest retailers in the country is now a national living wage employer, particularly as they were once one of the highest paying of the supermarkets.

“We have to question whether this is the result of private equity taking over a family-run business.”

In financial results released last week covering the year ending October 26, 2025, the retailer reported a 2.8% increase in like-for-like sales, with overall revenues rising 3.2% to £15.8bn. Whilst EBITDA reached £835m, Morrisons subsequently disclosed an annual loss of £381m.

Morrisons chief executive Rami Baitiéh said last week: “2024/25 was another year of renewal and modernisation for Morrisons. In a year when consumers were feeling the squeeze, we grew like-for-like sales for a twelfth consecutive quarter, maintained EBITDA and our market share, and demonstrated our resilience in the face of some tough external headwinds, from the cyber incident, rising inflation and government cost increases, which we worked hard to offset. In Q4, we also made the changes and investments in prices, promotions and loyalty that laid the foundations for more robust momentum in the first quarter of the new financial year.”

Chief finance officer Jo Goff added: “We worked hard during the year to offset the significant and unexpected cost headwinds arising from the government’s 2024 budget and other inflationary pressures, with our cost reduction programme delivering savings of £233m, to take the total to date to £845m. We expect to exceed our £1bn savings target by the end of FY26.”