Tesco has decided to increase wages for its store staff by 5.2%, while simultaneously eliminating the additional pay for Sunday shifts. The UK’s largest supermarket chain has confirmed that the hourly rate will rise by 43p to £12.45 starting from March 30, following an agreement with trade unions. Furthermore, a second raise to £12.64 will be implemented by the end of August, slightly surpassing the UK national minimum wage of £12.21 per hour set for April.
Despite the pay increase, Tesco will discontinue the 10% bonus previously granted for working on Sundays for all employees, a benefit that had already been discontinued for new hires. The company’s UK CEO described the £180m allocated for the wage hikes as a substantial investment, emphasizing its significance. The USDAW union highlighted that workers in London will observe their pay rise to £13.66 per hour initially, and then to £13.85.
These modifications stemmed from discussions between Tesco and the trade union, with Tesco asserting that the two-stage wage increase will lift pay levels by 5.2% above inflation. USDAW’s Daniel Adams praised the raise above inflation, noting that it establishes a substantial disparity between Tesco’s pay rates and the National Living Wage come April. To offset the elimination of the Sunday pay bonus, affected individuals will receive a one-time payment, the specifics of which Tesco did not disclose.
With larger retailers boosting wages to draw in more workers within a competitive labor market, Tesco’s wage adjustments align with industry trends. Earlier this year, Sainsbury’s announced a 5% hourly pay increase in two phases, expressing caution about recruitment in the face of escalating costs. Similarly, Lidl, a German-owned discount chain, disclosed plans in February to enhance hourly wages from £12.40 to £12.75. Moreover, Chancellor Rachel Reeves unveiled in the October Budget that employer National Insurance contributions will escalate alongside the national minimum wage come April. Despite businesses warning of price increases, job reductions, and store closures due to the added expenses, unions have criticized these claims
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