Tesco 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 30 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.

Tesco remains one of the few supermarkets to recognise an independent trade union and negotiate pay rates with them for all its hourly-paid colleagues in the UK.

As part of this pay deal for colleagues, Tesco will also be making the following changes: 

• The London allowance will increase to £1.21, up 7.1%, taking rates from £13.15 per hour to £14.36 per hour.

• To bring Tesco in line with other retailers, it will be removing Sunday premium payments, with eligible colleagues receiving a one-off payment. Bank Holiday premiums will be retained.

• Providing Colleague Clubcard discount with no cap for colleagues and their second Clubcard holder, replacing the previous £2,000 allowance.

• Increasing the maximum company sick pay entitlement to 20 weeks for eligible colleagues.

• On top of its pay deal, Tesco continues to have a market-leading 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, Tesco UK CEO, 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, USDAW National Officer, 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.”

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