Tesco will increase store workers’ pay by 7%, its third pay increase for this group of employees in the past 10 months.
The retailer has reached an agreement with Union of Shop, Distributive and Allied Workers (Usdaw) to increase workers’ pay from £10.30 to £11.02 from 2 April 2023.
The deal takes store employees’ pay above, or at, the voluntary Living Wage Foundation rate.
The agreement also sees the creation of two new London allowance areas, to reflect the additional costs people in certain parts of the capital face. Those in London boroughs will see their location allowance will increase to 93p per hour, taking their basic pay plus location pay to £11.95, while staff inside the M25 but not a London borough will receive a 73p increase to their allowance, taking their basic pay plus location pay to £11.75 per hour.
Pay settlements
Shift leaders will also see their additional skills payment increase by 40p per hour to £2.26, meaning their hourly rate excluding any location premium will rise to £13.28.
Tesco will keep Sunday premiums in place for staff who joined the company before 24 July 2022, but the rate will be reduced from 25% to 17%.
Tesco UK and Ireland CEO Jason Tarry 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.”
Daniel Adams, Usdaw national officer 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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Several major supermarket chains have increased workers’ pay multiple times over the past year. Aldi increased store colleagues’ pay by up to 15% from the beginning of this year, with wages starting at £11 an hour, while Sainsbury’s also upped workers’ pay to £11 an hour from February.
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