Tesco is to hike the pay of its shopfloor and warehouse workers by more than 10% across the next two years.

The supermarket giant will usher in the pay increase over two stages. Its minimum rate of pay will be upped from £8.42 to £9 per hour from September 1 this year.

Tesco’s lowest-paid staff will receive a second pay rise on October 4, 2020, when the rate will increase again to £9.30.

The grocer is also permanently replacing its staff bonus plan in favour of the higher basic hourly rate. Tesco said this would provide “more certainty” around the take-home pay of hourly paid workers.

Tesco added that it was “bucking the trend across the retail sector” by continuing to offer premium payments of time-and-a-quarter for all Sunday and bank holiday shifts.

Britain’s biggest retailer said the pay deal had been developed in partnership with Usdaw and staff representatives.

Tesco UK boss Jason Tarry said: “We are delighted we have been able to offer our colleagues a pay increase of over 10%, despite the significant economic challenges and uncertain times many retailers are currently facing.

“Together with our other colleague benefits, it makes our total reward package more competitive than ever before.”