Tesco 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 combined investment in hourly pay over the last year is a record £450 million. 

To reflect the increasing costs our colleagues are currently facing, this new rate will come into effect from an earlier date of 2 April 2023 and represents a 7% rise in base pay.

This is on top of the investments we have made since April 2022 to support our colleagues. As well as investing in our hourly rate of pay, we continue 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.

Alongside this, colleagues also benefit from a competitive reward package that includes share schemes, the Tesco Retirement Savings Plan where we match contributions up to 7.5%, an Employee Assistance Programme and much more. 

As part of this pay deal for colleagues, we 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. 

Jason Tarry, Tesco UK & ROI CEO 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.”

Daniel Adams, USDAW National Officer 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.”