Britain’s Tesco raises store worker pay by 9.1 per cent

Tesco (TSCO.L), Britain’s biggest retailer, said this week it would raise store workers’ hourly pay by 9.1 per cent, in a move that reflects the increase in the government-mandated minimum wage.

The supermarket group, one of the country’s largest private sector employers , said a deal struck with shopworkers’ union USDAW means hourly base pay will rise from 11.02 pounds ($13.98) to 12.02 pounds from April.

That is ahead of the government’s national living wage, which will increase by 9.8 per cent to 11.44 pounds an hour.

Tesco’s London workers will get 13.15 pounds an hour.

The group said the rise would cost it over 300 million pounds.

The Bank of England is keeping a close eye on wage settlements as it assesses the direction of interest rates. It fears rapid wage growth could add more inflationary pressure across the economy.

Worker wages in Britain have only recently begun outpacing inflation, which held steady at 4 per cent in January, still double the central bank’s target of 2 per cent.

Sainsbury’s (SBRY.L), Britain’s second biggest supermarket group, announced a 9 per cent pay rise for its workers in January, with an hourly rate of 12 pounds from March.

The No. 3 player, Asda, last week announced an 8.4 per cent hike. However, its increase to 12.04 pounds an hour will not take effect until July.

Other retailers, including Marks & Spencer (MKS.L), Amazon (AMZN.O), Aldi, Lidl and Costa Coffee have also announced pay rises for 2024.

($1 = 0.7881 pounds)