Tesco store workers are to be given a 7% pay rise, in what will be the third increase in ten months.
The supermarket reached an agreement with the Union of Shop, Distributive and Allied Workers (USDAW) and will increase the hourly pay rate by 72p.
This will take the hourly wage of a store worker from £10.30 to £11.02 and staff see the pay rise from April 2.
Tesco said the increase in hourly pay will represent an investment of more than £230million.
As part of the pay deal with the Usdaw, Tesco will also increase its “additional skills payment” for shift leaders by an extra 40p to £2.26.
This will bring their hourly wage up to £13.28.
The big four supermarket will also introduce two new London Allowance areas for staff working in London Boroughs.
This allowance will increase to 93p per hour, taking their basic pay plus location pay to £11.95.
For staff working in Outer London, inside the M25 but excluding London Boroughs, their allowance will increase to 73p per hour, taking their basic pay plus location pay to £11.75.
Over the last 10 months, base pay for Tesco staff will have increased by nearly 15.5%.
Tesco will also continue to offer Sunday premiums to staff who joined the supermarket before July 24, 2022.
This rate will however reduce from 25% to 17%.
As well as this, Tesco said it will continue to provide their store staff with free food at in-store canteens, a salary advance scheme and a discount of up to £1,500 a year off their shopping.
According to Usdaw around 220,000 Tesco across the UK will benefit from this increase.
Chief executive of Tesco UK & ROI Jason Tarry said: “For the second year in a row, we have made a record single-year investment in base pay for our colleagues.
"We know that many colleagues have felt the pressure of rising costs this year, and we are absolutely committed to supporting them with competitive base pay and exclusive colleague benefits.
"This agreement recognises the incredible work and dedication our teams show every day in serving our customers.”
Daniel Adams, national officer at Usdaw said: “This deal, which follows earlier agreements with the Union on additional investment outside of the normal annual negotiations and bringing of the 2023 pay negotiations forward, represents a significant step forward for pay within Tesco retail.
“It represents a third increase in pay in 10 months and ensures that the business continues to respond positively to the significant pressures our members face.
"Furthermore, it demonstrates the value of employers engaging constructively with trade unions at this incredibly difficult time.”
The new pay rates apply to staff of all ages and exceeds the national living wage, which currently stands at £9.50 an hour.
The Usdaw union represents around 360,000 workers in the UK.
