Supermarket chain Morrisons has become embroiled in a significant pay dispute with its workforce after informing staff it cannot offer substantial wage increases this year, leading to union accusations that the retailer is becoming a "national living wage employer."
Union Accusations and Negotiation Breakdown
The Bradford-based supermarket group, which operates as the UK's fifth largest grocery retailer, is currently engaged in tense discussions with Usdaw (Union of Shop, Distributive and Allied Workers). The union represents approximately 45,000 Morrisons employees across the country and has publicly criticised the company's position on pay negotiations.
Usdaw alleges that Morrisons management has declined to propose any pay rise beyond the statutory national living wage, which currently stands at £12.21 per hour for workers aged 21 and over. This rate is scheduled to increase by 4.1 per cent to £12.71 in April 2026, while the minimum wage for workers between 18 and 20 will rise by 8.5 per cent to £10.85 per hour.
Company's Financial Justification
Morrisons has linked its decision to pay staff the minimum allowed amount to what it describes as "a number of challenges" facing the business. The supermarket group highlighted £200 million of "unexpected" cost increases that came into force last April, including changes to national insurance contributions that have significantly impacted operational expenses.
A Morrisons spokesman elaborated on the company's position, stating: "Over the last financial year, we've invested over £100 million in colleague hourly pay, and with the national living wage increase in April 2026, we will invest a further £70 million."
The company also pointed to pressure from "strong competition for sales and market share" within the highly competitive supermarket sector, as well as the lingering impact of a cyber attack on its technology supplier Blue Yonder in late 2024, which disrupted operations and incurred additional costs.
Union's Strong Response
Darren Matthews, Usdaw national officer, expressed profound disappointment with Morrisons' stance, stating: "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."
Matthews raised questions about whether the company's position reflected broader changes following private equity ownership, noting: "We have to question whether this is the result of private equity taking over a family-run business."
The union official emphasised that Morrisons staff are "core to the success of the business" and expressed frustration that the company had "not meaningfully engaged with Usdaw in trying to secure a fair pay deal for our members."
Current Status and Next Steps
Morrisons has confirmed that it has "not been able to present an offer to the Usdaw national committee at this time" and acknowledged that the union will now proceed with a ballot of their membership regarding potential industrial action. Despite the current impasse, the company maintains that it wants "to continue the dialogue with Usdaw" and find a resolution.
The supermarket group emphasised the need to balance pay offers with "the overall performance, affordability and long-term stability of the business," suggesting that financial constraints prevent more generous wage increases despite previous investments in staff pay.
Usdaw has urged Morrisons to "change their stance and come back to the negotiating table" as the dispute threatens to escalate, potentially affecting store operations and customer service across the retailer's national network of supermarkets.
