Tesco Announces Major Pay Rise to £13.28 Hourly Rate from March 29
Tesco has unveiled a substantial pay increase for its colleagues across all UK supermarkets, with the hourly rate set to rise to £13.28 from March 29, 2026. This new rule represents a 5.1% pay award, which is above the current national inflation rate, and forms part of a significant investment exceeding £200 million by the retail giant.
Agreement with Trade Union Usdaw
The supermarket chain has reached an agreement with the trade union Usdaw to implement this pay rise for colleagues working in stores and online fulfilment centres. This deal builds on Tesco's ongoing commitment to supporting its workforce with a market-leading package of pay and benefits, reinforcing its position as the UK's largest supermarket, competing with rivals like Sainsbury's, Lidl, Waitrose, Aldi, and Asda.
Enhanced Benefits and Allowances
As part of the comprehensive agreement, the London Location Allowance will also see an increase from £1.21 to £1.27 per hour. This adjustment means that colleagues working within the M25 will earn an effective hourly rate of £14.55, further boosting their earnings in the capital.
Over the past five years, Tesco's hourly-paid colleagues have experienced a remarkable 43% increase in pay. During this period, the company has enhanced its benefits package to include:
- A virtual GP service for convenient healthcare access.
- Enhanced family leave policies, offering 26 weeks of fully paid maternity leave and six weeks of fully paid paternity leave.
- A competitive reward package featuring a Colleague Clubcard discount of up to 15% on shopping.
- A retirement savings plan that matches contributions up to 7.5%.
- A share saving scheme and an Employee Assistance Programme for additional support.
Leadership and Union Perspectives
Ashwin Prasad, Tesco UK CEO, expressed his satisfaction with the deal, stating, "Our colleagues play a vital role in delivering for our customers every single day. I’m pleased we’re able to announce this pay deal which reflects our deep appreciation for everything they do and represents another meaningful investment in colleague pay. Together with our comprehensive benefits package, it reinforces Tesco as a place where people can build a rewarding, long‑term career and continue to grow and thrive."
Daniel Adams, Usdaw National Officer, highlighted the union's role in securing the agreement, noting, "Our Union Reps across the business deserve a significant amount of credit for securing this pay deal - whether they are a Rep in-store or part of the negotiating team. This deal builds on the negotiations of the last few years and not only delivers a real terms increase to wages but extends the gap between the Tesco rates of pay and the National Living Wage."
Adams also emphasised a groundbreaking aspect of the deal: Tesco has become the first retailer to commit to providing paid leave to support staff who experience domestic abuse. He added, "The Union is also particularly pleased that the business has agreed to be the first retailer to commit to providing paid leave to help support staff who experience domestic abuse - something that could make a huge difference for those affected. Taken together, it continues to demonstrate the value of a modern and progressive relationship between independent trade unions and employers."
This pay rise and enhanced benefits package underscore Tesco's dedication to investing in its workforce, ensuring competitive compensation and comprehensive support for its employees across the UK.
