British supermarket chain Tesco has agreed to increase the pay of its hourly-paid store and customer fulfilment centre (CFC) workers by 5.8% later this year.

From 24 July, these workers will earn £10.10 ($13.90) an hour, up from their current hourly wage of £9.55 ($12.47).

The move is part of the company’s £200m investment in its workers, which also includes an extension of colleagues’ discount allowance and new employee training.

In addition, Tesco will increase the skills payment of its delivery drivers to £0.90 an hour from 1 May, as well as raise the hourly pay of its customer delivery drivers and click and collect assistants to £11 from 24 July.

The company will also offer any vacant hours to colleagues working less than 16 hours a week.

The pay rise announcement comes after Tesco reached an agreement with trade union USDAW.

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Tesco UK and Ireland CEO Jason Tarry said: “We are delighted to have reached an agreement with USDAW that recognises the vital role our colleagues play in our business now and in the future, giving them a well-deserved pay rise, more access to extra hours and setting out a long-term commitment and investment in their careers at Tesco.

“These investments in our colleagues are central to making Tesco what we truly want it to be: a great place to work for all. A place that attracts and retains the best talent in the industry.”

Other supermarket chains, including Sainsbury’s, Morrisons, Lidl and Aldi, have also increased their basic pay rate.

Earlier this month, Tesco shared plans to make its British-grown bedding plants peat-free as part of its plans to reduce its carbon footprint.

The company will reduce its use of peat by 95% across its UK bedding plant range, with the aim to make the products fully peat-free next year.