esco will increase its hourly pay for shop staff and fulfilment centre workers by 5.8 per cent from £9.55 to £10.10.
The retailer, which is the UK’s largest private employer, said the pay increase will come into force from July 24.
It comes after a number of Tesco’s supermarket rivals – including Sainsbury’s, Morrisons and Aldi – increased their rate of basic pay.
The supermarket also confirmed it will up the hourly rate for its customer delivery drivers and click & collect assistants to £11 from July.
“This new deal recognises the contribution our colleagues make to our business at a time when household budgets are under pressure,” the company said.
“Given the uncertainty in the economic environment, this will be a one-year deal, rather than two-year, and we will review pay again with Usdaw (Union of Shop, Distributive and Allied Workers) in 2023.”
Staff members will also see their Clubcard discount allowance increased from £500 to £1,500 for the year, Tesco said.
Jason Tarry, chief executive of Tesco UK & ROI, said: “We are delighted to have reached an agreement with Usdaw that recognises the vital role our colleagues play in our business now and in the future, giving them a well-deserved pay rise, more access to extra hours and setting out a long-term commitment and investment in their careers at Tesco.
“These investments in our colleagues are central to making Tesco what we truly want it to be: a great place to work for all, a place that attracts and retains the best talent in the industry.”
Daniel Adams, Usdaw national officer, said: “At such a difficult time, Usdaw is pleased to have secured a pay deal that not only delivers the highest hourly rate of pay in the sector but also delivers on the union’s New Deal for Workers campaign, giving our members the right to request a ‘normal hours’ contract and ensuring a minimum 16-hour contract going forward.”