Hundreds of thousands of Tesco employees are set to receive a pay rise this month, as the UK’s largest supermarket ramps up investment in frontline staff amid intensifying competition across the grocery sector.
From 29 March, hourly pay for store workers and staff in online fulfilment centres will increase by 5.1 per cent to £13.28, representing a £200m investment by the retailer. Employees working within the M25 will see their hourly rate rise to £14.55, including an increased London allowance of £1.27.
The uplift places Tesco ahead of the new national living wage of £12.71 for workers aged 21 and over, which comes into effect in April, and marks the latest move in an ongoing pay race among the UK’s major supermarkets.
Over the past five years, Tesco has increased hourly pay for store colleagues by 43 per cent, as it looks to strengthen its position as a competitive employer in a tight labour market. The latest rise also builds on a broader package of benefits, including enhanced family leave, a virtual GP service and staff discounts of up to 15 per cent.
Tesco UK chief executive Ashwin Prasad said the investment reflects the critical role frontline staff play in the business.
“Our colleagues play a vital role in delivering for our customers every single day,” he said.
“This pay deal represents another meaningful investment in colleague pay and reinforces Tesco as a place where people can build a rewarding, long-term career.”
The move comes as rival supermarkets also step up wage increases. Sainsbury’s has raised hourly pay by five per cent to £13.23 nationally and £14.54 in London, while Lidl has increased entry-level pay to £13.45 nationally and £14.80 in the capital.
Aldi is set to offer the highest rates, with store assistants earning £13.50 nationally and £14.88 in London from April.
Alongside the pay increase, Tesco has also confirmed plans to introduce a new domestic abuse policy later this year, which will include up to three days’ paid leave for affected employees. The initiative marks a first for the UK grocery sector.
Usdaw national officer Daniel Adams said the agreement demonstrates the impact of ongoing collaboration between the union and the retailer.
“This deal not only delivers a real-terms increase to wages but extends the gap between Tesco rates of pay and the national living wage,” he said.
“We are also particularly pleased that Tesco has committed to providing paid leave to support staff experiencing domestic abuse – something that could make a significant difference.”
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