• Under-25s to also get living wage of £7.20 an hour 
  • Boss Peter Davis says he wants to “create more permanency”
  • ”Retention and development is key to our long-term success”, he says

Wesfarmers, the new owner of Homebase, has vowed to pay under-25s the new living wage as part of a bid to improve conditions for employees.

Peter Davis, managing director of Westfarmers-owned retailer, said he also wants to “provide a better overall income” for its employees by offering team members more contracted hours and “create more permanency”.

Davis said the retailer would also be looking to introduce performance-related pay scales, which will “increase opportunities for reward and recognition”.

Homebase, which was acquired by Wesfarmers in January, plans to eventually scrap the Homebase fascia and replace it with its Bunnings brand, Australia’s biggest DIY retailer.

In an internal memo seen by Retail Week, Davis said: “We want to ensure that all team members are rewarded for effort and performance as well as providing an environment in which our teams can grow.”

From Sunday, all employees aged 18 and over will receive at least £7.20 an hour.

The changes mean its store staff will get pay increases of an average of £555 per year.

“This is a strong investment creating the culture we want for our teams and a business we can all be proud of. Retention and development is key to our long-term success,” Davis said.

The Government’s living wage, which takes effect on April 1, means employers must pay staff aged 25 or over £7.20 an hour. The current national minimum wage is £6.70 an hour so the living wage will result in more than a million workers getting a wage rise.

Pay and conditions have been a hot topic in recent months as retailers grapple with rising costs. B&Q, Tesco and Wilkinson have recently made controversial changes to their pay in relation to the living wage.