Sainsbury’s (LON: SBRY) has announced plans to increase basic pay for shopfloor staff – whilst also ending paid breaks, annual bonuses and premium pay on Sundays.

The latest pay rise will increase to £9.80 an hour in London and £9.20 an hour in the rest of the UK, significantly more than the £8.75 an hour paid by rival retailers Aldi and Lidl. 

Despite the increase in hourly wages, some members of staff may face a pay cut due to the absence of paid breaks, bonuses and premium pay.

Sainsbury’s have said the changes will have a positive impact on the majority of staff and plan on giving top-up payments so no staff would see a reduction in payments over the next 18 months.

“The retail sector has never been more competitive and we know that our customers really value our colleagues and the excellent service they provide in our shops,” said Simon Roberts, the Sainsbury’s retail and operations director.

“Which is why we think it is so important to invest further in our colleagues so they feel rewarded and motivated to do the best possible job for our customers every day.”

Joanne McGuinness, who is the national officer for Usdaw, the shop workers’ union, said: “Usdaw has long been making the case for the real living wage and beyond, so this deal takes Sainsbury’s staff 45 pence per hour above that £8.75 rate.

“While this is welcome news for Usdaw members working in Sainsbury’s, we will be looking closely at the whole deal. We want to check the effects on all individual workers. We will now enter into talks with the company.”

The supermarket chain will put all employees on new contracts “ensuring consistency and fairness across all stores, regardless of age or length of service”.

The new wages will be put into practice from September this year, according to the supermarket.