Tesco has announced a new two-stage pay deal to take its hourly rate to £12.64 by the end of August.
However, the supermarket giant also revealed it was scrapping its Sunday premium as part of the new deal negotiated with union bosses.
Under the terms of a deal with Usdaw, pay for hourly paid staff will initially increase from £12.02 to £12.45 from 30 March, before moving to the higher rate in August.
Tesco said it was removing the Sunday premium to “bring Tesco in line with other retailers”, with eligible colleagues receiving a one-off payment as the deal comes to an end.
It said bank holiday premiums would be retained.
Tesco said it represented an above-inflation increase of 5.2% and built on the “significant investment” it had made in colleague pay and benefits in recent years. It added the £180m investment meant hourly-paid colleagues will have seen a pay increase of 32% since April 2022.
“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,” said Tesco UK CEO Matthew Barnes.
“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 added: “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.”
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