2.5% pay increase welcomed by Tesco's UK staff
The UK's biggest supermarket Tesco has said it will award a quarter of a million workers a pay rise.
Tesco's 233,000 UK staff are getting a 2.5% increase from next month - a year after they received their last pay rise - following talks with union Usdaw.
Customer assistants - who make up around 65% of its store staff - will receive an additional 0.2% on top of the 2.5%, taking their hourly rate past the £7 per hour mark for the first time.
The increase is lower than the UK's high rate of inflation - which held at 4.5% in May - but is ahead of the latest average earnings figures, which showed an increase of just 1.8% in the year to April.
Tesco and the wider supermarket sector has come under pressure recently as consumers rein in spending as the cost of living remains high, wage growth slows and the economic recovery falters.
On Tuesday, the supermarket giant posted a 0.1% drop in like-for-like sales, excluding VAT and fuel, in its first quarter, a slight improvement on the 0.7% fall in the previous quarter. Total group sales, including fuel and VAT, were up 7.8%.
The group unveiled an overhaul of executive pay last month after nearly 40% of its shareholders voted against the retail giant's pay policy at its AGM last year.
Under the new scheme, chief executive Philip Clarke could still pick up nearly £7m in pay and bonuses this year if the company meets all of its targets, but a separate scheme for US boss Tim Mason was scrapped.
The supermarket also announced that around 225,000 of its staff were to share a record £110m bonus pot following an annual profits haul of £3.8bn.
The amount 225,000 Tesco staff will share from the supermarket's record £3.8bn profits