Tesco PLC (LSE:TSCO) has agreed to increase its hourly pay in a move it says is to help its staff battle the cost-of-living crisis.
The hourly base salary is set to increase by 72p to £11.02, with workers currently being paid £10.30.
This 7% increase marks the third time the supermarket has increased its workers’ pay in the last ten months.
Tesco said the pay rise will cost around £230mln and add to a record £450mln invested in hourly pay over the last year.
The changes that will come into effect on 2 April also include a 40p an hour raise for shift leaders.
Workers within the M25 are set to receive an additional pay upgrade to help fight the higher expenses that come with working within the capital.
“For the second year in a row, we have made a record single-year investment in base pay for our colleagues,” said Jason Tarry, Tesco UK and Ireland chief executive.
“This agreement recognises the incredible work and dedication our teams show every day in serving our customers.”
The consumer price index (CPI) found that in January 2023 inflation was at 10.1%.
The FTSE 100 company faced backlash in October when it offered its managers a 3% wage increase, a pay cut in real terms as inflation reached 10% with little indication of decelerating.
Tesco began increasing wages in July 2022 when it improved hourly rates by 5.8% to £10.10.
In November, it followed on with a 1.9% increase in base pay resulting in the current £10.30 salary.
Overall, the wage increase represents a 14.7% increase since April 2022, which in real terms reflects a 4.6% rise.
Last month the supermarket announced it would be restructuring parts of its hot food and deli counters which could result in 2,100 workers losing jobs.
The job cuts -assuming the workers at risk receive a base pay and work on average 4 hours a day, 5 times a week- would be saving Tesco more than £5mln annually.
Tesco shares are currently trading at £2.51 having risen by 9% in 2023.