Tesco launches £70m bonus scheme after soaring profits

Tesco will pay a ‘thank you’ bonus to more than 220,000 workers after soaring profits last year.

The retailer, the UK’s largest private employer, said it would hand out about £70 million to hourly paid employees throughout its stores, customer fulfilment and customer engagement centres, equating to about £300 each for full-time workers.

The bonus comes on top of what Tesco said was its biggest ever staff pay rise, announced in February. Profits shot up last year by 160%.

The chain’s chief executive since October 2020, Ken Murphy, said the payout to staff reflected the “hard work of colleagues” who had helped the business to deliver sales and profit growth.

Major supermarket chains – including Aldi, Tesco, Asda and Sainsbury’s – all increased wages ahead of this month’s rise in the minimum wage. On 1 April the national living wage rose from £10.42 an hour to £11.44.

The best minimum hourly rates are currently said to be paid by Aldi (£12.04 outside the M25; £13.21 within) and Lidl (£12 and £13.55).

Tesco has reduced prices to compete with Aldi and Lidl, the German discounters, amid the cost of living crisis. It claimed to have been the cheapest full-line grocer over the past 16 months, cutting prices on average by 12% on about 4,000 products over the year.

Murphy added: “We’ve never had higher employee engagement scores than we’ve had this year, and we’ve consistently been number one on the Advantage survey with suppliers for eight years running. We have also given reasonable returns to shareholders, so we think the balanced model is working.”

The Unite union accused the company of profiteering. Reacting to the announcement of Tesco’s full year profits, Unite general secretary Sharon Graham said: “Tesco is raking in mountains of cash while families struggle to put food on the table because of sky-high prices. Many companies have used the cost-of-living crisis to grab excessive profits.

“There is an epidemic of profiteering in our economy – the government has been missing in action and failed to curb it.”

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