Argos is facing potential disruption to its UK distribution network, after staff at a flagship DC in Staffordshire overwhelmingly rejected the company’s latest pay offer in a long running dispute.

Union members at Argos’s Barton-under-Needwood site, described by Unite as the company’s “jewel in the crown” within its distribution network, have thrown out the latest pay offer, effectively exhausting the current process.

The site, which has some 300 employees two-thirds of which are Unite members, sits outside of the national pay deal agreement in place across the rest of the network, which Unite claims demonstrates its importance to Argos.

Pay talks have been underway since last year – in effect frozen from the 1 August 2012 – and Unite regional officer Roy Coyle told that members were angry because since discussions began the retailer’s business performance had improved significantly, something his members do not feel has been reflected in current talks.

Argos is believed to have previously offered to increase pay by 1.6% over two years but this was conditional to employees reducing the length of their breaks.

“We have written to the company asking if they’ll reconsider, although there has been no ballot for strike action yet,” said Coyle.

Wincanton is Argos’s transport and warehousing partner. Although the company operates around 15 shunters at the site, the dispute is not understood to directly involve them, although industrial action would likely have an associated impact.

Argos confirmed it was in pay negotiations with Unite at the DC but said until they were complete it had no further comment to make.

Argos recently revealed it would be trialling a new hub and spoke distribution model.