Tesco has invested more than £200m in an above-average pay increase of 5.1% for store colleagues, starting from March 29.
The retailer said it had reached an agreement with trade union Usdaw on the hourly pay rate increase, which brings pay rates for staff in stores and online fulfilment centres to £13.28 an hour.
As part of the announcement, the retailer’s London location allowance will also increase from £1.21 to £1.27, resulting in an hourly pay rate of £14.55 for staff within the M25.
Over the last five years, hourly-paid Tesco staff have received a 43% pay rise, which the supermarket said shows it has been “focused on supporting its workforce with a market-leading package of pay and benefits”.
Alongside increasing hourly wages, Tesco said it had also enhanced other benefits by offering virtual GP services, had enhanced family leave and offered 26 weeks fully paid maternity leave and six weeks fully paid paternity leave.
The grocery giant also offers staff a 15% Clubcard discount on their shopping, retirement savings plans and an employee assistance programme.
Tesco UK chief executive Ashwin Prasad said: “Our colleagues play a vital role in delivering for our customers every single day. I’m pleased we’re able to announce this pay deal, which reflects our deep appreciation for everything they do and represents another meaningful investment in colleague pay.
“Together with our comprehensive benefits package, it reinforces Tesco as a place where people can build a rewarding, long‑term career and continue to grow and thrive.”
Usdaw national officer Daniel Adams said: “Our union reps across the business deserve a significant amount of credit for securing this pay deal − whether they are a rep in-store or part of the negotiating team. This deal builds on the negotiations of the last few years and not only delivers a real terms increase to wages but extends the gap between the Tesco rates of pay and the national living wage.
“The union is also particularly pleased that the business has agreed to be the first retailer to commit to providing paid leave to help support staff who experience domestic abuse, something that could make a huge difference for those affected. Taken together, it continues to demonstrate the value of a modern and progressive relationship between independent trade unions and employers.”
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