Tesco Unveils 5.2% Wage Hike, Eliminates Sunday Bonus in Major Pay Restructure

Tesco, the UK’s largest supermarket chain, has announced a significant pay increase for its store staff, raising wages by 5.2% effective March 30, bumping the hourly rate up by 43p to £12.45. This wage hike follows negotiations with trade unions, and another rise to £12.64 is scheduled for the end of August, which exceeds the upcoming national minimum wage of £12.21 per hour. A notable change, however, is the termination of the Sunday pay bonus, previously set at a 10% increase, particularly impacting existing staff, as new workers had already been ineligible for this bonus.

Tesco’s UK chief executive characterized the £180 million expenditure on pay increases as a “significant investment” in staff. Additionally, workers in London will see their pay rates raised to £13.66 and later to £13.85. The USDAW union has welcomed this above-inflation pay rise, stating that it creates a notable difference between Tesco’s pay rates and the expected National Living Wage.

In light of the Sunday pay bonus removal, affected employees will receive a one-off financial payment, although details regarding the payment amount remain unclear. This strategic move comes amidst an increasingly competitive labor market, prompting other supermarket chains to also adjust their pay, with Sainsbury’s announcing a similar 5% increase. However, concerns are arising from rising operational costs, as expressed by businesses, suggesting potential price increases, job reductions, and store closures, which union representatives dispute.