Tesco has introduced a new minimum hourly pay rate of £13.28 across all its UK stores and online fulfilment centres, a policy that took effect on March 29, 2026. The move follows an agreement reached with the trade union Usdaw earlier this year, marking a significant boost for the supermarket chain's workforce.
Details of the Pay Increase
On March 18, 2026, Tesco announced that it had finalised a deal with Usdaw to raise the hourly wage for shop floor staff and online fulfilment workers to £13.28. This represents a 5.1% increase, which the company stated is above the national inflation rate and builds on recent investments in colleague pay and benefits.
Additionally, the London Location Allowance has been increased from £1.21 to £1.27 per hour, meaning employees working within the M25 motorway now earn £14.55 per hour.
CEO's Statement
Tesco UK CEO Ashwin Prasad commented: "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."
Industry-Wide Pay Increases
Tesco is not alone in raising wages. Other major retailers have also announced pay boosts for their staff around the same period.
- Aldi increased hourly pay for Store Assistants to £13.50 nationally from April 1, 2026, with those inside the M25 earning £14.88. Based on length of service, rates rise to £14.47 and £15.20 respectively. The change benefits 28,000 hourly-paid workers, marking the second pay rise for Aldi teams in 2026 after January's enhanced rates and extended maternity pay.
- Lidl, Primark, and M&S also unveiled pay packet boosts.
National Living Wage Context
The pay hikes come alongside increases in the National Living Wage, which rose to £12.71 for those aged 21 and over. For 18-20 year olds, the National Minimum Wage increased to £10.85 per hour, while apprentices and under-18s now receive a minimum of £8 per hour.
These changes reflect a broader trend among UK retailers to improve compensation amid rising living costs and a competitive labour market.
