Tesco is to increase the hourly pay for employees in stores from £11.02 to £12.02 per hour, which is above the 2024 real living wage outside London.
It announced the rise after reaching an agreement with trade union Usdaw. Tesco remains one of the few supermarkets to recognise an independent trade union and negotiate pay rates with it for all its hourly-paid colleagues in the UK.
The new rate, which will come into effect on 28 April 2024, represents a 9.1% pay rise and an investment of more than £300 million in hourly pay.
The 2024 Tesco pay deal also includes a 50% increase in paid paternity leave to six weeks on full pay, and an increase in maximum sick pay entitlement up to 18 weeks.
The supermarket is creating one London allowance area at £13.15 per hour – the living wage rate – for stores within the M25. Pay for these workers will rise from £11.95 in inner London and £11.75 in outer London.
Tesco is also changing its Sunday pay premium from 17% to 10% for employees who joined before July 2022, but it still remains one of few retailers to pay staff extra on Sundays.
This announcement follows the investment Tesco has made in hourly-paid store workers’ pay in recent years, including a total increase of 26% in hourly pay since April 2022, equivalent to a more than £750 million investment.
Matthew Barnes, UK chief executive of Tesco, said: “This represents another significant investment in our colleagues, building on the last two years of investment. We recognise the amazing work our colleagues do every day in serving our customers and we’re really proud to offer such competitive rates of pay alongside a great range of exclusive colleague benefits.”
Daniel Adams, national officer for the Union of Shop, Distributive and Allied Workers (Usdaw), added: “This deal not only delivers an inflation-busting increase for Tesco employees, but it also demonstrates the value of progressive employers engaging constructively with trade unions at a time when the cost-of-living pressures continue to be keenly felt by our members.
“Moreover, at a time when some employers are rowing back from commitments they have made around the real living wage, this deal ensures all rates of pay for store employees continue to be either at or above the real living wage.”
Tesco also offers a virtual GP service for colleagues, flexible working from day one, and enhanced family leave policies including 26 weeks’ fully-paid maternity, adoption and kinship leave. It provides employees with Clubcard discount of up to 15% on their shopping, with an annual allowance of £2,000 (up from £1,500), which staff can also share with a family member in a second household.