Minimum wage hikes to put added cost pressure on grocery retailers 

New report from Excel Recruitment warned that increases to minimum wage will cause a ripple effect, pushing most stores to increase pay by at least 5%

New regulations on pension auto-enrolment and extended sick leave benefits will add further pressure, the salary guide warns, making it difficult for retailers to absorb added costs. 

Ireland's grocery sector will enter the new year with a mix of challenges, marked by significant wage increases and rising labour costs, Excel Recruitment has warned. 

Releasing its Grocery Retail Salary Guide 2025, the recruitment agency warned that while the increase in the minimum wage to €13.50 from January will help protect workers, the pay rise will create a ripple effect on overall wages, pushing most stores to increase pay by at least 5%.

The agency also reported that since 2020, the minimum wage has risen by 32%, prompting retailers to prioritise hiring and retaining talent despite tight margins. 

Additionally, new regulations on pension auto-enrolment and extended sick leave benefits will add further pressure, the salary guide warns, making it difficult for retailers to absorb added costs. 

“With last year’s costly rollout of Deposit Return Scheme (DRS) equipment, and heightened spending on security due to increased retail crime, grocery stores are feeling the strain more than ever," said Nikki Murran, Director of Grocery Retail at Excel Recruitment. 

These changes go far beyond entry-level pay, affecting wages across the board and driving retailers to find competitive hiring strategies. Despite these obstacles, the sector remains forward-focused, using key talent and innovative customer experiences as a competitive edge."

According to the report, retailers are increasingly investing in fresh food offerings as a differentiating factor in a crowded market, with many stores enhancing deli, bakery, and produce sections, even hiring skilled chefs, bakers, and butchers to elevate in-store quality. According to the agency, a 20% rise in fresh food roles was registered at the end of 2024.

“By hiring skilled talent for fresh food sections, retailers aim to improve customer satisfaction and profitability. Many believe these investments will help foster customer loyalty and counterbalance rising operational costs,” continued Ms Murran.