Tesco supermarket workers to get 7% pay rise as Aldi creates 2,400 jobs

Tesco opens its first checkout-free store, giving customers the opportunity to shop and pay without scanning a product or using a checkout in London, Britain, October 18, 2021. Picture taken October 18, 2021. Ben Stevens/Parsons Media/Handout via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY.
Photo: Tesco said staff will get £11.02 an hour from 2 April. Photo: Ben Stevens/Parsons Media/Handout via Reuters

Tesco (TSCO.L) will raise the hourly pay rate for store workers by 7% from April in its third pay rise in a year.

Britain's biggest retailer said staff will get £11.02 an hour from 2 April, up from £10.30 currently.

Workers in London boroughs will receive a higher pay rise ⁠— 8.4% or 93p per hour, taking their hourly rate to £11.95.

The increase puts the retailer slightly ahead of the best-paying grocers Aldi and Lidl.

Staff at Tesco will also continue to receive free food and a discount of up to £1,500 a year off their shopping.

Tesco said the investment would cost it more than £230m ($276.9m).

It comes as Aldi has said it will create 2,400 more jobs as part of plans to "almost double" its number of stores in London.

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The plans will be in addition to Aldi’s announcement last week to create 6,000 jobs across the UK this year through its wider growth ambitions.

The German discounter will almost double its 60-strong estate within the M25 and create around 2,400 jobs.

It is targeting empty office blocks and new housing locations for potential development.

It said it is offering property agents a finder’s fee of either 1.5% of freehold price or 10% of the first year’s rent for leasehold sites, in a bid to help identify new sites.

Aldi is looking for locations big enough for its standard 20,000 sq ft stores, which typically need around 100 dedicated parking spaces.

It is also on the lookout for smaller locations for its Aldi Local format stores.

Ben Shotter, regional managing director at Aldi, said: “We strongly believe that access to affordable, high-quality food is a right, not a privilege.

“But we’re conscious that there are still many areas, particularly in the capital and within the M25, that don’t have access to an Aldi.

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“As a result, too many people have to make do with big prices at the big supermarkets. We want to give more people a new Aldi store with our award-winning products at unbeatable prices.

“We are looking for locations across the UK, but particularly in London.”

Aldi has rapidly grown its UK business in recent years through new store openings, taking it to almost 1,000 sites.

The group also became the UK’s fourth largest supermarket in recent weeks, overtaking Morrisons, after recording strong sales growth amid increased demand from customers facing higher household bills.

Aldi said plans to create the raft of jobs through the new London stores will be additional to its announcement last week that it will create 6,000 jobs across the UK this year through its wider growth ambitions.

Meanwhile, Morrisons is cutting prices across a range of its own-brand products as it joins a string of supermarkets battling to retain customers amid the cost of living crisis.

Prices of some 64 cupboard essentials, breakfast items and fresh products will be reduced by an average of almost a fifth, Morrisons said.

The supermarket said it has invested £25m into the price cuts in what the second price reduction campaign in less than a month.

Chief executive David Potts said: “We are just seven weeks into 2023 and already this is our fifth significant price activity of the year.

“These latest price cuts follow hard on the heels of two notable in store price cuts involving well over 1,000 products, and two strong fuel promotions, demonstrating our determination and commitment to make a positive difference to our customers’ pockets.”

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