Zarah ChoudharyTesco has reached an agreement with trade union USDAW that will increase the hourly pay rate for colleagues in stores, from £12.02 to £12.45 from 30th March 2025, and again to £12.64 from the end of August.
This two-stage rate increase represents an above-inflation increase of 5.2% and builds on the significant investment Tesco has made in colleague pay and benefits in recent years.
This latest £180m investment in colleague pay will mean hourly-paid colleagues will have seen a pay increase of 32% since April 2022, equivalent to a more than £900m investment.
As part of this pay deal for colleagues, Tesco will also be implementing several changes.
The London allowance will increase by 7.1% to £1.21, raising hourly rates from £13.15 to £14.36.
In an effort to align with other retailers, Tesco will be removing Sunday premium payments, though eligible colleagues will receive a one-off payment to compensate for this change.
However, Bank Holiday premium payments will remain in place.
Additionally, Tesco will be enhancing its Colleague Clubcard discount by removing the cap for both colleagues and their second Clubcard holder, replacing the previous £2,000 allowance.
Finally, the company will increase the maximum sick pay entitlement to 20 weeks for eligible colleagues, providing greater financial security during periods of illness.
On top of its pay deal, Tesco continues to have a package of colleague benefits, including a Virtual GP service for colleagues, the right to request flexible working from day one, and enhanced family leave polices including 26 weeks fully paid maternity and six weeks fully paid paternity.
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 award-winning Tesco Retirement Savings Plan which matches contributions up to 7.5%, an Employee Assistance Programme and much more.
Matthew Barnes, CEO of Tesco UK, said: “Our colleagues are our greatest asset, and this pay deal recognises the brilliant work they put in day-in, day-out to serve our customers.
“It also represents another significant investment in our colleague pay, which combined with our fantastic package of benefits, means Tesco continues to be a place to get on and thrive in a fulfilling and rewarding career.”
Daniel Adams, national officer at USDAW, said: “It is a real achievement that Usdaw reps have been able to secure an above-inflation pay deal that builds on the negotiations of the last few years.
“Not only does it ensure a meaningful gap between the Tesco rates of pay and the National Living Wage in April, but it also means that in August, the basic rate of pay in Tesco will exceed the Real Living Wage rate outside of London and meet it within the M25.
“This, along with the other negotiated improvements, demonstrates the value of a modern and progressive relationship between independent trade unions and employers.”
