Morrisons has reportedly told workers they will not be given significant pay rises this year, following the Government’s tax increases on employers and the minimum wage hike.

Bosses at the supermarket are locked in a disagreement over pay rises with trade union Usdaw, which represent roughly 45,000 Morrisons workers, LBC reported.

The grocer’s bosses have refused to offer a pay rise beyond the national living wage, according to reports.

In an email sent last week, the retailer highlighted Rachel Reeves’ October 2024 Budget, claiming that her decision to raise employers’ national insurance contributions and lower the threshold where they were paid had significantly impacted the business.

The changes, alongside a 6.7% rise in the living wage, had cost Morrisons an additional £200m and limited profitability, its bosses said. 

Morrisons also blamed “a number of challenging conditions” during the past year, such as fiercer competition from rival supermarkets and the impact of its cyber-attack in late 2024.

The news comes after trade union bosses accused Morrisons of failing to enter “meaningful negotiations” regarding pay last week, saying they were not granting staff an increase above the national living wage.

Usdaw has called a ballot for February and has asked its members to reject the company’s current offer.

If an agreement cannot eventually be reached, the dispute could “lead to industrial action,” Usdaw said.

A Morrisons spokesperson said: “In our recent full year results announcement we highlighted that over the last 12 months we’ve faced a number of challenges, including an unexpected £200 million annualised increase in Government costs, strong competition for sales and market share and the Blue Yonder cyber attack.

“On top of this, 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.

“Against this backdrop, we have to balance any further pay offers, with the overall performance, affordability and long term stability of the business.”

They continued: “We have not been able to present an offer to the Usdaw National Committee at this time and the union has confirmed they will now follow the process and proceed with a ballot of their membership.

“It is Morrisons clear position that we want to continue the dialogue with Usdaw”

Usdaw national officer Darren Matthews said: “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 of the highest paying of the supermarkets.

“We have to question whether this is the result of private equity taking over a family-run business.

“We are very disappointed that the company has not meaningfully engaged with Usdaw in trying to secure a fair pay deal for our members, who are core to the success of the business.

“This ongoing failure to make a pay offer is damaging staff moral and making recruitment and retention more difficult for the business. We urge the company to change their stance and come back to the negotiating table.”

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