Tesco becomes latest store to give its workers extra pay

The company announced the second increase in hourly pay this year, and a doubling of a staff discount to support employees this Christmas.

From November 13, the basic hourly rate of pay in Tesco stores will increase by a further 20p to £10.30, and to £10.98 in London. This means hourly rates at Tesco will have increased by nearly eight per cent this year, building on what the company said was already a record single-year investment in store workers’ pay.

It will also be doubling its Colleague Clubcard discount for groceries to 20 per cent during the key Christmas shopping period from December 13-19.

The shopworkers’ union Usdaw welcomed the announcement, saying the business has also committed to bring next year’s pay negotiations forward to the Spring of 2023.

Usdaw said that, with pay negotiations now due to take place in January 2023, Tesco employees should also see a third uplift in pay within the 12 months since the last set of pay negotiations.

National officer Daniel Adams said: “As the cost-of-living crisis has deepened, Usdaw has continued to engage with Tesco on what can be done to support employees through this incredibly difficult time.

“Securing additional investment outside of the normal pay cycle is unprecedented within the business and we welcome the fact that the company has engaged positively with the union and recognised the need to respond.

“We also very much welcome the agreement to bring forward the 2023 pay review so that any investment secured through these talks will be paid sooner to the employees who need it the most.

“While the additional investment from the business is welcome, without further, wider interventions from the Government many workers who not so long ago were being hailed as heroes in the midst of the pandemic are facing economic catastrophe.

“Usdaw is campaigning for urgent Government action on the cost-of-living crisis and will continue to engage with employers to secure urgent assistance to tackle the hardship that many of our members are facing.”

Tesco chief executive Ken Murphy said: “We know our colleagues are experiencing the same pressures as our customers.”

He added that the measures taken so far – raising pay twice, increasing free meals in canteens and hiking staff Clubcard discounts – have been done to “try to make sure our colleagues don’t have to go to food banks”.

He remained tight-lipped about any further pay reviews or if they will become more frequent, adding: “We’re really committed to looking after our colleagues.”

The pay announcement came as Tesco revealed falling half-year profits and warned annual earnings will be towards the lower end of expectations amid soaring inflation and as customers trade down in the cost crisis.

The group posted a 10 per cent fall in underlying retail operating profits to £1.25 billion for the six months to August 27, despite group sales excluding fuel rising 3.1 per cent to £28.2 billion.

It warned of “significant” inflation pressures and a return in food shopper habits to those seen before the pandemic, which it said were being compounded by customer moves to rein in spending amid the cost-of-living crunch. It now expects annual underlying retail earnings of between £2.4 billion and £2.5 billion – the lower end of previous guidance for between £2.4 billion and £2.6 billion and a fall from the £2.7 billion notched up in the previous year.

Mr Murphy said: “Customers are seeking out the quality and value of our own-brand ranges as they work to make their money go further, whether they are switching from branded products, between categories or cutting back on eating out. As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market.”

Half-year results showed like-for-like retail sales edged up 0.7 per cent higher over the first half, having fallen by 1.5 per cent in the group’s first quarter.