Tesco is the latest supermarket to give its staff a pay rise as it makes its biggest investment in wages.

The retail giant is raising staff pay to more than £11 an hour as part of an investment of £230 million.

The supermarket and USDAW have achieved an agreement that would result in a 72p raise in the hourly wage rate for employees working in stores, from £10.30 to £11.02.

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This investment is the third pay rise for Tesco staff in the previous 10 months.

The supermarket said that its total annual investment in hourly wages was a record £450 million.

Tesco announced that this new rate, which represents a seven percent increase in basic pay, will go into effect on Sunday, April 2, an earlier date to reflect the rising costs its co-workers are now confronting.

As part of this pay deal for colleagues, Tesco said it will:

  • Increasing the additional skills payment for Shift Leaders by an extra 40p per hour to £2.26, taking their hourly rate to £13.28
  • 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.
  • Continuing to offer Sunday premiums for colleagues who joined Tesco before 24 July 2022 but changing the rate from 25 percent to 17 percent – maintaining the value of Sunday working for those eligible.

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Tesco claimed it continued to offer free food in-store canteens, a salary advance programme, and a discount of up to £1,500 per year off their shopping in addition to increasing our hourly rate of pay.

Jason Tarry, Chief executive Tesco UK & ROI, said: “For the second year in a row, we have made a record single-year investment in base pay for our colleagues.

“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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The announcement comes shortly after rival grocer Asda raised the hourly compensation for its employees by 10 percent.

The grocery chain has spent £141 million to raise the hourly wages of 115,000 of its employees who work in its 633 locations.

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