By Jonathan Davies

Sainsbury's will increase store workers' pay by 4% this weekend - it's biggest pay rise for more than a decade.

Nearly 140,000 workers will see their wage rise from £7.06 to £7.36 an hour, taking it above the median wage paid by the retail industry.

The British Retail Consortium (BRC) says that figure stands at £7.30.

The moves also takes the wage above the new National Living Wage of £7.20 announced by the Chancellor George Osborne in the Summer Budget. The National Living Wage will be compulsory for over 25s, but Sainsbury's increase does apply its 40,000 shop workers under that age.

Sainsbury's chief executive Mike Coupe said he wanted to reward staff for their continued hard work, and stressed that the supermarket giant can afford the wage increase.

He told the BBC: "We think we contribute a lot to the exchequer and I think we can more than pay our way."

Joanne McGuinness, national officer for shop workers' union Usdaw, said: "I'm pleased the company has listened to us as significant increases in retail pay is long overdue. We meet with the company every year and make a strong case for decent rewards for staff, particularly around pay, and the new rate of £7.36 is a step in that direction.

"For the small number of staff not covered by the increase we will make representations to the company to address this issue."