// Tesco increases hourly pay, taking the rate to over £11 an hour
// The new rate will come into effect from an earlier date of 2 April 2023 and represents a 7% rise in base pay
Tesco has made its biggest ever investment in hourly pay, taking the rate to over £11 an hour.
The supermarket has reached an agreement with USDAW that will significantly increase the hourly pay rate for colleagues in stores by 72p, from £10.30 to £11.02.
This represents the third pay increase for these colleagues in the last 10 months and an investment of more than £230 million.
The grocer said its combined investment in hourly pay over the last year is a record £450 million.
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To reflect the increasing costs its colleagues are currently facing, Tesco said this new rate will come into effect from an earlier date of April 2nd – representing a 7% rise in base pay.
As part of this pay deal for colleagues, Tesco said it will also be making the following changes:
- 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% to 17% – maintaining the value of Sunday working for those eligible.
As well as investing in our hourly rate of pay, Tesco said it continues to provide colleagues with free food in store canteens, a salary advance scheme and a discount of up to £1,500 a year off their shopping.
Chief executive Tesco UK & ROI 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.”
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.”
The news comes just days after fellow grocer Asda increased the hourly pay for its colleagues by 10%.
The grocer has invested £141m to increase the hourly-pay for 115,000 colleagues who work across its 633 stores.
The new rates exceed National Living Wage and Real Living Wage rates and follow an 8% pay increase for hourly-paid retail roles during 2022.
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