Tesco PLC (LSE:TSCO) is to hand out £50mln worth of 'thank you bonuses' to employees next month just weeks after announcing a pay increase.
Around 290,000 employees across all departments will be eligible, with Tesco saying it was a thank you to its staff for their hard work over the past year.
Employees will receive a bonus worth 1.25% of their salary at the end of May.
Tesco staff and warehouse workers are also getting a 5.8% per hour rise from £9.55 to £10.10 starting on July 24.
The bonus payout follows a challenging year for the supermarket sector, which has dealt with soaring demand in lockdowns, staff shortages caused by Covid-19and supply chain issues at home and abroad.
Rival supermarket chains Aldi, Lidl, Wm Morrison Supermarkets PLC (LSE:MRW) and J Sainsbury PLC (LSE:SBRY)'s have also recently raised their hourly rates.
Britain’s inflation rate hit a 30-year high of 7% in March, even before utility bills rose sharply in April.
Increasing prices are causing the greatest squeeze on household income since the 1950s.
Tesco warned the cost of living crisis would negatively impact profits in the forthcoming year.