Tesco announces record 10.5% pay increase for its store colleagues

23 Jun 2017

Tesco has today announced a significant new pay deal for hourly paid store colleagues which will see hourly rates increase by 10.5% over the next two years, from the current rate of £7.62 to £8.42 an hour by November 2018.

These increases, alongside Tesco’s benefits package which includes colleague bonus plan and pension, will take the average store colleague to an equivalent hourly rate of £9.52 by November 2018.

The retailer is also announcing a significantly improved maternity package from October 2017 which will see an additional 14 weeks’ half pay for all colleagues. The eligibility period for this will also reduce from two years to one year from July 2018.

Matt Davies, CEO of Tesco UK, said:

“This reward package sees our biggest investment in store pay for a decade, and gives colleagues a sustainable pay deal that rewards them for everything they do, while allowing us to also attract new talent.

“We also want to do all we can to help working parents and that’s why we are proud to offer a much improved maternity package to our colleagues.”

Hourly pay for store colleagues will increase in three stages:

  • From its current level of £7.62 to £8.02 in November 2017;
  • From £8.02 to £8.18 in July 2018; and
  • From £8.18 to £8.42 in November 2018.

Bucking the trend across the retail sector, Tesco will continue to offer premium payments for Sunday and bank holiday shifts as colleagues have said these are valuable to them. Colleagues will continue to receive time and a half for these shifts until July 2018, when the payments will change to time and a quarter. Under the new agreement 97% of colleagues will be better off. However, any colleagues negatively impacted by the changes will be supported with a lump sum transition payment worth 18 months of the difference in pay, paid in July 2018.

Tesco worked with union, Usdaw and elected colleague representatives to agree the deal.

Notes to editors

As part of the agreement the established rate of pay will now apply to colleagues at three months instead of the current nine months from July 2017.

ENDS