Supermarket workers of Grey Lynn Huckleberry have backed down from industrial action as the company agrees to negotiate an increase in workers' pay.

This morning workers from the organic grocery store, formerly known as Harvest, threatened strike action out of frustration at minimal pay rates.

First Union members had originally asked Huckleberry to pay the living wage of $20.20 to its employees, but the request was refused.

It then floated an increase to $19, which was also refused.

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Huckleberry employs 240 people in nine stores across Auckland and Tauranga.

Workers were scheduled to walk off the job at 3pm today, but that changed when Huckleberry bosses promised wage increases of $2 an hour for all staff employed for more than a year, $1.50 for staff who have been employed less than a year and $3 for all naturopaths.

CEO Richard Lee has also committed to increasing staff wages to the living wage by May next year.

"We've been working through this for probably the best part of seven months now," Lee said.

"We've gone from hiring 70 staff to 240 and to make sure we're here long term we need to work out how to improve the conditions for our staff as well as stay viable."

The process had been tricky, but Lee said he was happy with where the company was at in negotiations.

"It's important that as an ethical business we do [pay a living wage] and we back up what we say with what we do."

The pay increase would affect all staff, not just union members.

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First Union organiser Stephen Parry said that was a "really positive bargaining outcome".

"Moving towards a living wage in the retail sector is an idea that's time has come.

"This is the first supermarket which has made any commitment toward living wage. We're really pleased."

Parry said Huckleberry was still in negotiations with the union.

"We're really happy Huckleberry is taking the well-being of its workers seriously and this is a significant improvement," Parry said.

He said negotiation was a fair outcome, one which valued the dignity of its employees and customers.

Earlier in the day, Perry said the grocer's "ethical organic rhetoric" didn't match its business actions.

"Huckleberry, owned by the same group as EcoStore, positions itself as an ethical company selling ethical goods. Its workers, however, are paid less than those at many mainstream supermarkets," he said.

Parry said many customers shopped at Huckleberry because of its ethical ethos and expected the company to instil the same ethos to its employment practices.

"Huckleberry ― backed by its multimillionaire owner Peter Kraus ― is opening new branches and expanding as a business, but is not investing adequately in the well-being of its staff. For a business based on organics, its priorities are not in the right place.

It is understood negotiations with the grocery store and the union are under way.