Supermarket Aldi has upped the pressure on its rivals after announcing it will increase pay to at least £8.53 an hour and £9.75 in London from next month.
The German discounter said more than 3,350 UK employees will benefit from the February 1 pay hike, which marks an increase on its current minimum pay of £8.40 an hour nationally and £9.45 in London.
The move will see Aldi pay more than the voluntary Living Wage rate of £8.45 an hour announced by the Living Wage Foundation in November, while it also beats the Government's national Living Wage of £7.20 an hour, which will go up to £7.50 in April.
Aldi claimed its rate of pay will be the highest in the supermarket sector, beating closest rival Lidl's recently announced increase to £8.45 nationally from March.
Matthew Barnes, chief executive of Aldi's UK operations, said: "We recognise the valuable contribution that our thousands of store employees make every day.
"Their dedication and commitment is a key reason why Aldi is the UK's fastest-growing supermarket."
Aldi is also recruiting 4,000 new permanent employees across stores and warehouses over 2017 as it looks to open around 70 new shops this year.
The group, which already employs 29,000 staff in total across the UK, will open its 700th UK store in February, putting it on track to hit a target of 1,000 by 2020.
It is also set to open a distribution centre in Cardiff in March, taking its UK total to nine.
Industry figures revealed last month that the chain's increasing popularity showed no sign of slowing in the 12 weeks to December 4.
Aldi notched up a 10% rise in sales over the period, while its share of the sector edged up to 6.2% from 5.6% a year earlier, according to Kantar Worldpanel.
This left Lidl in the shade, with sales growth of 5.7% and a 4.6% market share.
The two discounters have sparked a fierce price war in the UK supermarket sector in recent years, with the established Big Four chains looking to win back market share lost to their new German rivals.