Supermarket retailer Tesco has announced that it will increase pay by 10.45% for hourly, store-based employees, as well as those employed at its Customer Fulfilment Centre (CFC), by October 2020.
The pay deal, which was agreed with the Union of Shop, Distributive and Allied Workers (Usdaw), will see selected employees receive a 6.9% pay rise from 1 September 2019, increasing wages from £8.42 an hour to £9.00 hour. A further pay increase of 3.3% will then be effective from 4 October 2020, raising pay to £9.30 an hour.
This higher hourly rate of basic pay will replace the supermarket’s employee bonus scheme, and will affect approximately 240,000 members of staff.
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The agreed pay deal, which was developed in partnership with both Usdaw and elected employee representatives, aims to respond to staff feedback, which found that employees wanted more pay certainty and a guaranteed, higher basic hourly rate.
Alongside the pay deal, Tesco will continue to offer premium payments of time and a quarter for shifts completed on Sundays or bank holidays.
Store-based and CFC staff last received a pay rise in 2017; this two-year deal increased pay by 10.57%.
Jason Tarry, chief executive officer at Tesco UK, said: “We are delighted we have been able to offer our [staff] a pay increase of over 10%, despite the significant economic challenges and uncertain times many retailers are currently facing.
“Together with our other [employee] benefits, it makes our total reward package more competitive than ever before.”