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Store employees will see their basic hourly pay go up by 5.3%, from £9.50 per hour to £10 per hour amid a rapidly increasing cost of living and in recognition of the “extraordinary work” they do for customers. 

In inner London, the hourly rate for workers will increase from £10.10 to £11.05, and from £9.75 to £10.50 for those living in outer London. The retailers’ drivers will also be given a pay rise, with Sainsbury’s Groceries Online drivers to receive £11.50 per hour while Argos Fast Track Delivery drivers will receive £11 per hour. 

Around 150,000 members of staff will benefit from the companies’ new pay rates, which go beyond the National Living Wage and the voluntary Real Living Wage. 

Chief executive Simon Roberts said: “To kick off the new year, I am pleased that one of the first things we are doing is investing in our colleagues and lifting our basic hourly rate of pay to £10.”

We are making this significant investment to show our colleagues how much we value the brilliant job they do for our customers every day.”

The Sunday Times reported that Sainsbury’s, the UK’s second largest supermarket chain, may see bids of over £7 billion from suitors such as Apollo. Although the interest from Apollo is only preliminary, the reports caused Sainsbury’s stock to jump 9.3% higher by 9am Monday in London, trading at 321.9p per share.

However, analysts remain sceptical of the report. Independent investment group Shore Capital called it “shallow” and “sensationalist”, explaining that the UK supermarket chain has long been a takeover target. The investment group also noted that it couldn’t discount Apollo bidding for the supermarket chain if it was not part of the consortium buying out Morrisons. At the end of last week Morrisons, a rival of Sainsbury’s, agreed to a £7 billion takeover by US private equity group Clayton, Dubilier & Rice (CD&R).

CD&R had previously made an offer of 230p a share, valuing Morrisons at £5.5 billion. However, this was rejected for undervaluing the retailer. CD&R has now upped its offer to 285p a share.

This week we learnt that two of the UK’s top supermarkets are merging, shaking up grocery shopping for generations to come. The £13 Billion merger between Walmart-owned Asda and Sainsbury’s, which recently bought out Nectar, is set to create a grocery powerhouse that can finally compete against Tesco Stores.

Following the announcement shares rocketed and the public was happy to hear prices would receive a 10% cut as a consequence of the merger. Rpeorts indicate no jobs will be cut, nor will any stores be closed. So what is this merger all about?

Finance Monthly spoke to Dr Naaguesh Appadu, Research Fellow at Cass Business School and member of the Mergers & Acquisitions Research Centre, who comments on Sainsbury's and Asda agreeing to £13bn merger.

Dr Naaguesh Appad said: “This deal is about market share. Neither Sainsbury’s nor Asda can afford to stay quiet. You just have to look at the grocery sector right now: Tesco has acquired Booker and Morrisons supplies products to Amazon. Therefore, it is key to show the leadership in terms of groceries for the Sainsbury’s/Asda merger to happen. It should be noted that they neither company can grow organically, and they don’t have the option of staying away Tesco, from the current market leader.

“This deal with see the consumer win two-fold. First, customers will be able to access more products and second, they’ll enjoy lower prices (execs have stated 10%) on common products due to competition on suppliers. It will be interesting to see how this plays out in terms of competition, now that executives have stated there are no plans to close Sainsbury's or Asda stores.”

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