What do supermarket workers really get paid?

A job at the local supermarket is a rite of passage for many New Zealanders entering the workforce. But does the pay stack up as a career?

Data from First Union, which represents some supermarket workers, shows that the pay on offer can vary a lot, depending on which supermarket you work for.

Bearing in mind the minimum wage is $23.15 per hour, what is on offer?

Woolworths

At Woolworths, a nightfill worker would start on an hourly rate of $24.93 at the moment, and move on to $26.21 after five years.

A checkout operator would start on $25.03 and progress to $26.31 after five years. A checkout supervisor would start on $26.19 and move up to $27.55 after five years.

A duty supervisor would start on $27.98 and progress to $29.40. There is an additional shift allowance available or union workers who work overnight of $1 an hour.

The union is currently in bargaining with Woolworths over a new agreement.

Department managers might earn $70,000 or $80,000 a year, the union said.

At Westport Fresh Choice, staff would start on $23.85 and at Fresh Choice Takaka, $23.20.

Costco

At Costco, a service assistant would start on $27 and receive a pay rise of 50c per hour after every 1040 hours worked. Supervisors would earn $33. Service clerks would start on $28 and progress at the same rate.

Managers would earn $86,000 and in-store optometrists, $100,000.

Foodstuffs

First Union has fewer members from Foodstuffs supermarkets. But it said there was significant variation between the supermarkets within the co-operative, because they are individually owned and operated.

At Pak’nSave Porirua, staff were starting on $23.20. In Taupō, they were starting on $23.80. Pak’n Save Lincoln Road in Auckland was paying a starting rate of $25.39 and Kilbirnie in Wellington was paying $26.

After five years at Lincoln Road and Kilbirnie, staff would move on to $27.04 and $27.79 an hour, respectively.

Farro Fresh

A Farro attendant would earn $23.20 for the first 600 hours, then shift to $23.50. A shift manager would earn $27.

What is it like to work there?

A survey by First Union of 1500 supermarket staff showed understaffing was a concern. Almost 40 percent said that was the most important workplace issue. Nearly three-quarters of respondents said their wages were not sufficient to cover their living expenses.

One supervisor from a Woolworths supermarket, who did not want to be identified, said she used to be proud of the relatively high rates of pay the company offered, but that had been eroded.

“I am one of the team that doesn’t even shop at my own store because I can’t afford to.”

She said the minimum wage paid by supermarkets should be equal to the Living Wage, which is currently $26 an hour.

She said that was a couple of dollars more than her current rate of pay.

“I could go to Costco and get $5 more an hour than I am getting now but I feel loyalty to my team. I don’t want to let them down or put them under unnecessary pressure.”

She said an increase to the living wage would represent an 11 percent jump. “It’s a big ask but it’s what our team need to survive.”

First Union national secretary for retail and finance Rudd Hughes said staff were being paid “poverty wages” if they were not able to cover their basic needs.

He said it was galling to see Woolworths undertaking an expensive rebrand rather than paying staff more.

Woolworths said it was not appropriate to comment when it was in bargaining.

“We are proud to pay our store team market-leading rates, to offer market-leading team benefits, and to be rolling out a $45 million safety improvement plan to ensure our team is safe at work.”

Foodstuffs said treating staff well was important to its co-operative members.

“We’re committed to paying our people fairly in a competitive market and investing in their development and futures. Our local owner operators understand the critical role their teams play in providing value and amazing service to customers and how to create work environments that enable them to thrive.”

A spokesperson said it had more than 36,000 staff across its operations.

“Our stores compete locally with other retailers and industries for talent, which means they need to be competitive and have a strong employment brand to both attract and retain great people. Being competitive isn’t just about hourly rates of pay. Employees are attracted to companies with a positive workplace culture, high engagement rates, and to roles which may offer them competitive pay rates, ongoing training and career development, health insurance and bonuses.  We’re proud of our record in these areas and the different ways our owners build engaged workforces.”

Have the pay rises been fair?

Infometrics chief forecaster Gareth Kiernan said, assuming that supermarket workers’ pay was closely tied to the minimum wage, their wages would have lifted relative to the average wage or general price level because of the large increases in the minimum wage, particularly over the last few years.

The Ministry of Business, Innovation and Employment said in its most recent review that New Zealand’s minimum wage was one of the most generous in the OECD in terms of relativity with the median wage.

“As a ratio to the median wage, the minimum wage has increased from 62 percent of the median wage in June 2017 to 72 percent in June 2023. This has compressed the distribution of wages in the lower-earning half of the labour market, which can reduce the ability for businesses to pass on higher wages to more experienced and skilled workers.”

Kiernan said one of the interesting aspects of pay rates was how much of them simply represented higher costs for businesses that ended up being passed on to customers, versus how much represented productivity increases.

“Retail has been one of the few areas to record a good productivity performance over the last 10 or 15 years, although this productivity growth has probably come at the expense of jobs growth as automation – like self-service checkouts – has become more prevalent. The biggest cost of living issue for me remains centred around housing affordability, which of course is not entirely captured in the CPI.

“Until housing supply issues are addressed, increases in the minimum or living wage are simply chasing their tail, because they feed through into higher business costs and then people need another pay rise the following year to keep up.”