Tesco announces biggest ever single investment in store colleague pay, bringing hourly rate up to £12.02 per hour

Tesco has reached an agreement with trade union USDAW that will significantly increase the hourly pay rate for colleagues in stores, from £11.02 to £12.02 which is above the Real Living Wage.  

Tesco remains one of the few supermarkets to recognise an independent trade union and negotiate pay rates with them for all its hourly paid colleagues in the UK.

This new rate will come into effect from April 2024 and represents a 9.1% rise in base pay and a record investment of more than £300m in hourly colleague pay. This announcement follows the significant investment Tesco has made in hourly paid store colleagues’ pay in recent years following previous negotiations, including a total increase of 26% in hourly pay announced since April 2022, equivalent to a more than £750m investment.

As well as investing in its hourly rate of pay, Tesco continues to support colleagues’ health, wellbeing and family commitments and is also announcing today an increase in paternity leave to an industry-leading 6 weeks fully paid, alongside an increase in maximum company sick pay entitlement to 18 weeks for eligible colleagues. 

This follows the launch of a Virtual GP service for colleagues, becoming the first major supermarket to offer the right to request flexible working from day one, and enhancing other family leave polices including 26 weeks fully-paid maternity, adoption and kinship leave, over the past year.

Tesco also provides colleagues with Colleague Clubcard discount of up to 15% on their shopping, free food in store canteens and a pay advance scheme. Alongside this, colleagues benefit from a competitive reward package that includes share save schemes, the Tesco Retirement Savings Plan which matches contributions up to 7.5%, an Employee Assistance Programme and much more. 

As part of this pay deal for colleagues, Tesco will also be making the following changes: 

• Creating one London Allowance area at £13.15 per hour for stores within the M25. This is an increase from £11.95 inner London/£11.75 outer London and keeps Tesco in line with the London Real Living Wage
• Increasing the annual Colleague Clubcard discount allowance to £2,000 (up from £1,500), which colleagues can also share with a family member in a second household.
• Continuing to be one of the few retailers that still pays a Sunday premium, for colleagues who joined Tesco before 24 July 2022. The percentage rate will change from 17% to 10% with the actual value increasing from £12.89 to £13.22 per hour on a Sunday.

Mathew Barnes, Tesco UK CEO 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, USDAW National Officer said:

“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.  We welcome the Company’s positive response through our negotiations which have resulted in the largest investment in pay in a single year, with the highest entry rate for store employees of any major supermarket.  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.”