Tesco, the UK’s largest retailer, will boost hourly pay for about 220,000 store employees by 7% beginning in April, another hike that will certainly pique the interest of the Bank of England, which is concerned about inflationary pressures in the economy.
The supermarket chain, one of the country’s top private sector employers, said a contract reached with shopworkers union USDAW will increase store workers’ hourly pay to 11.02 pounds ($13.25) on April 2, up from 10.30 pounds now.
Tesco (TSCO.L) said the hike, the third in 10 months, will cost it more than 230 million pounds and bring the company’s total pay investment over the previous year to 430 million pounds.
Asda, the third-largest grocery operator in the United Kingdom, announced a 10% salary increase for its employees on Friday. In January, No. 2 Sainsbury’s (SBRY.L) announced an increase.
BoE Governor Andrew Bailey earlier this month raised worries about wage-setting, despite signals that the increase in inflation – which peaked 11.1% in October before declining to 10.1% in January – had turned a corner.
Tesco stated that the new increase reflects the rising cost of living for its employees.
Yet, it is also likely to reflect Britain’s relatively tight labor market. Despite being on the verge of a recession, the country’s unemployment rate remained at five-decade lows this month, while employment increased.