Tesco invests £200m in colleague pay and skills

Tesco
// Tesco invests in colleague pay, benefits, and skills after negotiations with Usdaw
// The company is also increasing its Colleague Clubcard discount allowance by £500

Tesco has revealed a significant investment in colleague pay, benefits, and skills, following an agreement with Usdaw.

The investment includes a substantial new pay deal; increased access to extra hours; training to provide colleagues more skills and flexibility and an extension of the colleague Clubcard allowance.

The new pay deal for hourly-paid store and Customer Fulfilment Centre (CFC) colleagues will see their hourly rates increase 5.8% from £9.55 to £10.10, which will be effective from 24 July 2022.


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Tesco said it is able to make what is the biggest single-year investment in hourly store/CFC pay in at least a decade – representing around £200 million investment in colleagues.

This new rate means that, over the last 10 years, Tesco’s hourly rate of pay has increased by more than 40%.

For Customer Delivery Drivers, Tesco is increasing the skills payment to £0.90 per hour effective from 1 May 2022 and aligning Click & Collect Delivery Assistants to this skills payment, taking the total hourly rate for both to £11.00 from 24 July 2022.

Given the “uncertainty in the economic environment”, Tesco said this will be a one-year deal, rather than two-year, and it will review pay again with Usdaw in 2023.

Tesco will also invest in its total reward package, which provides benefits spanning programmes of support for mental, physical, financial wellbeing; colleague Clubcard discounts, and access to offers through its Rewards platform, Tesco Bank and Tesco Mobile.

The company is also increasing its Colleague Clubcard discount allowance by £500 taking the annual total allowance for all colleagues to £1,500 effective since 1 April 2022.

This allows colleagues to do more shops at Tesco at a 10% discount, increasing to 15% every payday weekend.

The grocer is also offering vacant hours to colleagues working fewer than 16 hours a week, before recruiting externally.

All new contracts will be based on a minimum of 16 hours per week, Tesco said.

“These investments in our colleagues are central to making Tesco what we truly want it to be: a great place to work for all. A place that attracts and retains the best talent in the industry,” Tesco UK & ROI CEO, Jason Tarry said.

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