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Retail

Tesco To Raise Pay For Store Staff As UK Living Wage Looms

Tesco, the UK's biggest private-sector employer, will increase the minimum hourly rate of pay for its in-store staff this year, following moves by competitors to comply with the UK government’s National Living Wage.

From July, about 230,000 store workers will receive a pay rise of as much as 3.1 per cent to £7.62 an hour, Tesco said in a recent statement.

"We’ve spent a lot of time working with colleague representatives," Matt Davies, Tesco’s head of UK and Ireland, said in the statement. "We’ve agreed one of the highest pay and benefits packages in retail for store colleagues."

Complying with the new minimum hourly wage requirement, which begins at £7.20 in April and will rise to £9 by 2020, will cost Tesco £500 million, chief executive officer Dave Lewis said in October. Competitors Sainsbury's and Morrisons both announced increases last year.

Tesco staff who work on Sundays or public holidays may still lose out from the proposed changes. They will now receive 1.5 times their normal hourly wage on those days, whereas currently, Tesco’s more experienced store workers receive twice their normal hourly rate. Employees who have been negatively affected will be given a one-time payment equivalent to 18 months of the difference in pay, the company said.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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