Tesco leads wage hike trend in British retail sector

Tesco, the largest retailer in Britain, has announced a substantial increase in hourly pay for its store workers, reflecting the rise in the government-mandated minimum wage.

The supermarket giant revealed on Tuesday that it would boost hourly base pay by 9.1 per cent, following negotiations with the shopworkers' union USDAW.

This move will see the hourly wage jump from $13.98 to $15.27 starting from April, surpassing the government's national living wage, which is set to increase by 9.8 per cent to $14.53 per hour.

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Tesco's London-based employees will receive even higher compensation, with an hourly rate of $16.71. The company estimates that this wage hike will cost it over $381 million.

The Bank of England is closely monitoring wage settlements as it evaluates the trajectory of interest rates, expressing concerns that rapid wage growth could exacerbate inflationary pressures across the economy.

While worker wages in Britain have only recently begun to outpace inflation, which remained at 4 per cent in January—twice the central bank's target of 2 per cent.

In a similar vein, other major supermarket chains are also increasing their workers' pay.

Sainsbury's, the second-largest supermarket group in Britain, announced a 9 per cent pay rise for its employees in January, elevating the hourly rate to $15.25 effective from March.

Asda, the third-largest player, recently unveiled an 8.4 per cent wage hike, bringing the hourly pay to $15.30, though this increase won't take effect until July.

Additionally, several other retailers including Marks & Spencer, Amazon, Aldi, Lidl, and Costa Coffee have announced pay rises for 2024.

(With inputs from Reuters)