Supermarket giant Tesco unveils new £180m investment in staff pay

The retailer announced today that hourly pay for store colleagues will increase to £12.45 from March 30, 2025, and again to £12.64 from the end of August – up from the current rate of £12.02.

Tesco will also increase the London allowance to £14.36 an hour, and it will be removing Sunday premium payments. Eligible colleagues will instead receive a one-off payment, while Bank Holiday premiums will be retained.

The grocer said the two-stage increase represents a 5.2% above inflation increase and builds on “the significant investment Tesco has made in colleague pay and benefits in recent years”.

The retailer also said that, with the latest investment, Tesco staff will have seen a 32% pay increase since April 2022 – equivalent to a £900m investment in the period.

Alongside the pay increases, Tesco also provides staff with a Colleague Clubcard discount of up to 15% on their shopping, free food in store canteens and a pay advance scheme.

Tesco UK chief executive Matthew Barnes said: “Our colleagues are our greatest asset, and this pay deal recognises the brilliant work they put in day-in, day-out to serve our customers. It also represents another significant investment in our colleague pay, which combined with our fantastic package of benefits means Tesco continues to be a place to get on and thrive in a fulfilling and rewarding career.”

Usdaw national officer Daniel Adams said: “It is a real achievement that Usdaw reps have been able to secure an above-inflation pay deal that builds on the negotiations of the last few years. Not only does it ensure a meaningful gap between the Tesco rates of pay and the National Living Wage in April, but it also means that in August, the basic rate of pay in Tesco will exceed the Real Living Wage rate outside of London and meet it within the M25.

“This, along with the other negotiated improvements, demonstrates the value of a modern and progressive relationship between independent trade unions and employers.”