Tesco staff pay rise: November 2022 pay increase explained - which products has supermarket frozen prices on?

Tesco has announced two major cost of living measures for both its staff and customers as the UK heads into the Christmas shopping season.

It comes as the supermarket revealed plans to axe hundreds of head office jobs but increase the number of store staff ahead of the festive period.

The UK’s biggest supermarkets are beginning to vie for Christmas shoppers amid near-record levels of inflation, with food prices making one of the biggest contributions to average price hikes.

But while Tesco has introduced an ‘inflation-busting’ price freeze on thousands of key items, NationalWorld has recently found it is among several of the UK’s biggest retailers that have already implemented above-inflation increases across their value-tier ranges.

So which prices is Tesco freezing - and what has it announced about staff pay? Here’s what you need to know.

How much will Tesco staff pay rise?

Tesco has joined the likes of Sainsbury’s and Aldi in announcing additional pay increases for its staff amid the cost of living crisis.

From 13 November, its basic hourly rate of pay will increase 20p to £10.30 - or £10.98 for London workers as the cost of living in the capital tends to be higher. The supermarket said the change means hourly rates have risen 8% this year.

In July, Tesco workers received a 55p rise in their hourly rate from £9.55 to £10.10, while a similar wage increase for London workers took their hourly rate to £10.78. It came after talks with the shop workers union USDAW.

Tesco narrowly averted strikes over Christmas 2021 after making a pay offer to distribution staff that unions described as “derisory”.

While the most recent announcement means the supermarket’s staff earn at least 80p an hour above the National Living Wage - the legal minimum for people aged 23 and above - it is still some way short of the Real Living Wage.

This voluntary scheme says wages should be set at £10.90 (£11.95 in London) if they are to accurately reflect the current cost of living.

As well as the pay increase, Tesco staff will also have their store discounts upped to 20% between 13 and 19 December. The retailer said it has also enhanced the selection of free food and hygiene products available to its employees in staff rooms.

How does Tesco staff pay rise compare?

Tesco is the UK’s biggest supermarket. It perceives the two major rivals to its crown as second-placed Sainsbury’s and fourth-placed Aldi.

It has clearly viewed the latter of these as its biggest competitor given it has a specific ‘Aldi Price Match’ aimed at keeping its customers away from the German discounter.

Where it hasn’t been able to match Aldi is on front-of-store staff wages. In August, Aldi upped employee pay to £10.50 an hour (or to £11.95 for those in London).

For distribution roles, Tesco pays £11 an hour compared to Aldi’s £12.66 an hour.

However, compared to Sainsbury’s, Tesco is now paying non-London workers 5p more an hour. But London staff are earning 32p less than employees of the supermarket’s closest rival.

In terms of the other major supermarkets, Morrisons is paying staff a minimum of £10.20 an hour (£11.05 in London) as of October. Meanwhile, Lidl became the UK’s best-paying major retailer in September, with staff earning £10.90 an hour outside London and £11.95 within the M25 - wages in line with the Real Living Wage.

Pressure is now on Asda to increase pay for its employees. The supermarket increased basic pay to £10.10 an hour in April 2022 but has not matched its rivals’ subsequent pay rises.

The GMB union said this fact should be “a source of massive shame” for Asda. It also claimed Asda had refused to meet its representatives to discuss pay.

“While other companies are trying to protect hard-working employees from the cost of living crisis, Asda seems happy to sit back while its workers struggle,” said Nadine Houghton, GMB’s national officer.

“It’s time for Asda’s new owners to focus on investing in staff, instead of further debt leveraging Asda to expand their empire.”

In response, an Asda spokesperson told NationalWorld the supermarket was “investing in keeping our prices low and supporting our colleagues”.

They added: “We’re listening to our colleagues and taking action to support them wherever we are able. This year we have invested in two pay increases for our hourly paid store colleagues and were able to pay a bonus worth an average of £413 to a full time, hourly paid colleague.

“We’ve also listened to feedback from our colleagues and removed the qualifying period for their colleague discount, along with offering numerous special events throughout the year offering an increased discount."

What is the Tesco Christmas 2022 price freeze?

As well as increasing its staff pay, Tesco has announced a swathe of price freezes for consumers until 2023.

It comes as we enter what is known in the retail world as the ‘golden quarter’ - the run up to Christmas when households tend to spend more money and retailers tend to make most of their profits.

Tesco says its price-lock commitment will apply to more than 1,000 products, including kitchen cupboard staples and health and beauty products, until 3 January 2023. You will be able to see which prices have been frozen in-store and online because Tesco will pop a ‘Low Everyday Prices’ sign next to eligible products.

Specific items featuring in the deal include:

• Tilda Pure Steamed Basmati Rice, 250g - £0.95
• Ski Strawberry Mousse, 4x60g - £1.10
• Mccain Home Chips, 2.25kg - £4.30
• Oral-B Pro-Expert Professional Protection Toothpaste, 75ml - £1.99
• Heinz Baked Beans Snap Pots, 4X200g - £2.49
• Nescafe Original 3-In-1, 6 Sachets 102g - £0.99
• Johnson’s Baby Cotton Buds, 200 Pieces - £0.95
• Robinsons Orange Squash, 1L - £1.75

“We know times are tough for many customers right now, particularly as we head into the winter months,” said Tesco UK CEO Jason Tarry.

“We hope this extended price-lock commitment gives our customers the certainty of knowing that over a thousand household favourites will stay at the same great price for months to come – helping them budget when they need it most.”

As well as these savings, Tesco said its Clubcard Christmas Savers Scheme would offer shoppers a £12-off voucher if they saved up their Clubcard vouchers for their Christmas shop. Meanwhile, a Tesco toy sale that has been launched this week will offer savings of up to 50% on brands like Lego and Stickle Bricks.