Tesco has announced its third pay increase for store staff in the space of 10 months, in a deal that will see its hourly rate rise from £10.30 to £11.02.
The supermarket said today’s announcement, amounting to an investment of £230m, had taken its combined spending on hourly pay over the course of the year to £450m.
The 7% rise in base pay will come in early, from 2 April, said Tesco, to help colleagues facing the cost of living crisis.
Tesco also announced it was increasing the additional skills payment for shift leaders by an extra 40p per hour to £2.26, taking their hourly rate to £13.28.
It is also introducing two new London allowance areas. For colleagues working in London boroughs, their allowance will increase to 93p per hour, taking their basic pay plus location pay to £11.95. For colleagues working in outer London (inside the M25 but excluding London boroughs), their allowance will increase to 73p per hour, taking their basic pay plus location pay to £11.75.
However, Tesco is also reducing the premiums it pays for staff working on Sunday, from 25% to 17%, in a move it said would retain the “value” of staff working on Sundays.
The move comes after Asda earlier announced a 10% pay increase for store staff in what it also said was a record investment for its workers and one that takes it from bottom of the top four to joint top with Aldi in terms of hourly pay.
Also like Asda, Tesco’s move follows a sweeping management shake-up across its stores last month as part of a series of efficiency savings that will in total affect more than 2,000 roles.
How the supermarkets compare on pay
“For the second year in a row, we have made a record single-year investment in base pay for our colleagues,” said Tesco UK and ROI CEO Jason Tarry.
“We know that many colleagues have felt the pressure of rising costs this year, and we are absolutely committed to supporting them with competitive base pay and exclusive colleague benefits. This agreement recognises the incredible work and dedication our teams show every day in serving our customers.”
Usdaw national officer Daniel Adams said: “This deal, which follows earlier agreements with the union on additional investment outside of the normal annual negotiations and bringing of the 2023 pay negotiations forward, represents a significant step forward for pay within Tesco retail.
“It represents a third increase in pay in 10 months and ensures that the business continues to respond positively to the significant pressures our members face. Furthermore, it demonstrates the value of employers engaging constructively with trade unions at this incredibly difficult time.”
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