Tesco Boosts Store Worker Pay by 9.1%, Leads UK Retailers

Tesco, Britain’s largest retailer, has announced a significant pay increase for its store workers, with hourly wages set to rise by 9.1 percent. This decision comes as the national living wage sees a 9.8 percent increase to 11.44 pounds an hour, with Tesco’s new hourly base pay surpassing this at 12.02 pounds starting in April.

The pay raise, which was agreed upon with the shopworkers’ union USDAW, will benefit Tesco’s employees across the country, including London workers who will see their hourly rate climb to 13.15 pounds. The move is expected to cost Tesco over 300 million pounds but demonstrates the retailer’s commitment to staying ahead of government mandates and supporting its workforce.

This development is part of a broader trend in the UK retail sector, with Sainsbury’s, the nation’s second-largest supermarket group, implementing a 9 percent wage increase earlier this year. Asda, another major player in the market, has also announced an 8.4 percent hike, although their new rate of 12.04 pounds an hour won’t take effect until July.

Other retailers such as Marks & Spencer, Amazon, Aldi, Lidl, and Costa Coffee have disclosed pay rises for 2024, signaling a competitive push to attract and retain employees in a tight labor market.

The Bank of England is closely monitoring these wage settlements as they could potentially contribute to inflationary pressures within the economy. With worker wages only recently beginning to outpace inflation—which remained at 4 percent in January—these pay increases are a welcome change for employees who have been grappling with higher costs of living.

As the retail sector adjusts to these new wage standards, the impact on the broader economy will be closely watched by analysts and policymakers alike.

Hourly pay increase

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