British supermarket chain Tesco has agreed to increase the pay of its store colleagues following talks with trade union Usdaw.

From 2 April, the retailer’s store colleagues will see their hourly pay increase from £10.30 ($12.48) to £11.02 ($13.36).

Tesco will also increase the additional skills payment for its Shift Leaders by £0.40 an hour to £2.26.

In addition, the retailer is introducing two new London Allowance areas, which will increase the allowance of its workers in London Boroughs and Outer London.

Colleagues in London Boroughs will have their allowance increase to £0.93 an hour, while for those in Outer London, it will rise to £0.73 an hour.

This will increase the basic pay plus location pay for Tesco’s London Boroughs colleagues to £11.95 and that for colleagues in Outer London to £11.75.

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The announcement marks the third pay rise for these colleagues in the last ten months, representing a total investment of more than £230m.

Tesco has now invested a total of £450m in hourly pay over the past 12 months.

Tesco UK and Ireland CEO Jason Tarry said: “We know that many colleagues have felt the pressure of rising costs this year, and we are absolutely committed to supporting them with competitive base pay and exclusive colleague benefits.

“This agreement recognises the incredible work and dedication our teams show every day in serving our customers.”

Usdaw national officer Daniel Adams said: “This deal, which follows earlier agreements with the union on additional investment outside of the normal annual negotiations and bringing of the 2023 pay negotiations forward, represents a significant step forward for pay within Tesco retail.

“Furthermore, it demonstrates the value of employers engaging constructively with trade unions at this incredibly difficult time.”

Last month, Tesco reported that its like-for-like group retail sales grew by 5.7% in the third quarter of fiscal 2022/23.