Tesco on Tuesday announced a 9.1 per cent hourly wage increase for its store workers, in line with upcoming changes to the government’s mandated minimum wage.

The UK’s largest retailer said that it would raise salaries from £11.02 to £12.02 starting in April, having reached an agreement with trade union USDAW.

The company said that it would also create one London Allowance area at £13.15 per hour for stores within the M25. This is an increase from £11.95 for inner London and £11.75 for outer London and keeps Tesco in line with the London Real Living Wage.

The rise in base pay for store workers represents a record investment of more than £300 million, the company said. It added that salaries have experienced a total increase of 26 per cent in hourly pay since April 2022, amounting to more than £750 million investment.

The company also announced an increase in paternity leave to 6 weeks fully paid, alongside an increase in maximum company sick pay entitlement to 18 weeks for eligible colleagues.

Matthew Barnes, Tesco UK chief exec 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 added: “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.”

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