Tesco freezes prices on more than 1,000 products amid cost of living crisis and hands workers 20p-an-hour pay rise – but warns annual sales will be down as it posts 10 per cent fall in profits for first half of the year
- Tesco announced it will be giving staff an extra pay rise to cope with rising costs
- The supermarket has frozen prices on more than 1,000 products until 2023
- Staff will receive increased discount of 20 per cent between December 13 and 19
Tesco has frozen the prices of more than a thousand everyday products and handed staff a second pay rise this year in a bid to help customers and staff cope with the cost-of-living crisis – but the supermarket giant warned its annual sales will be at the lower end of expectations as consumers continue to tighten their belts amid soaring inflation.
The company announced the second increase in pay for workers this year, raising the basic hourly rate of pay by 20p to £10.30, and to £10.98 in London from November 13.
It means hourly rates at Tesco will have increased by nearly eight per cent this year – almost in line with the rate of inflation.
Cash-strapped customers will be able to benefit over the Christmas period, as the store will be freezing the prices of more than 1,000 everyday products until 2023.
Tesco staff can also expect another pay rise early next year, despite the company already stating 2022 has seen a record single-year investment in store workers’ pay.
Tesco will be helping its employees further by doubling its Colleague Clubcard discount to 20 per cent during the key Christmas shopping period from December 13-19.
Yet the positive news for staff and customers was tempered by the supermarket giant revealing that profits for first half of the year fell by 10 per cent and its annual sales are expected to be towards the lower end of expectations.
Tesco have announced a prize freeze on over 1,000 products until 2023 and a pay rise for employees to help combat the rising cost of living
Tesco workers will have a raise in the basic hourly rate of pay by 20p to £10.30, and to £10.98 in London from November 13
Tesco has been facing competition against rivals to retain staff, as fellow supermarkets Morrisons, Sainsbury’s and Asda have also hiked pay for their store workers this year.
The shopworkers’ union Usdaw welcomed the pay rise, saying the business has also committed to bring next year’s pay negotiations forward to the Spring of 2023.
Usdaw said that, with pay negotiations now due to take place in January 2023, Tesco employees should also see a third uplift in pay within the 12 months since the last set of pay negotiations.
Tesco’s 2023 price freeze on over one thousand products
Products included in Tesco’s price freeze can be found in their Low Everyday Prices range.
Top picks include:
Mcvities Digestive Twin Pack 2x400g – £2.30
Robinsons Orange Squash 1L – £1.75
Kronenbourg 1664 15x440ml – £10
Kellogg’s Coco Pops 720G – £3.50
Ginsters 4 Pack Cornish Pasties 720G – £4.00
Finish All In One Max Lemon 30 Dishwasher Tablets 480G – £5.00
Birds Eye 4 Breaded Cod Cakes 198G – £1.40
Simple Biodegradable Cleansing Wipes 25Pack – £1.80
Napolina Chopped Tomatoes 4x400G – £2.50
National officer Daniel Adams said: ‘As the cost-of-living crisis has deepened, Usdaw has continued to engage with Tesco on what can be done to support employees through this incredibly difficult time.
‘Securing additional investment outside of the normal pay cycle is unprecedented within the business and we welcome the fact that the company has engaged positively with the union and recognised the need to respond.’
On the price freeze of products, Tesco UK Chief Executive, Jason Tarry, said: ‘We know times are tough for many customers right now, particularly as we head into the winter months.
‘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.’
Tesco also revealed falling half-year profits and warned that annual earnings will be towards the lower end of expectations amid soaring inflation and as customers trade down in the cost crisis.
The group posted a 10 per cent fall in underlying retail operating profits to £1.25 billion for the six months to August 27, despite group sales excluding fuel rising 3.1 per cent to £28.2 billion.
It warned of ‘significant’ inflation pressures and a return in food shopper habits to those seen before the pandemic, which it said were being compounded by customer moves to rein in spending amid the cost-of-living crunch.
It now expects annual underlying retail earnings of between £2.4 billion and £2.5 billion – the lower end of previous guidance for between £2.4 billion and £2.6 billion and a fall from the £2.7 billion notched up in the previous year.
Chief executive Ken Murphy said: ‘Customers are seeking out the quality and value of our own-brand ranges as they work to make their money go further, whether they are switching from branded products, between categories or cutting back on eating out.
‘As we look to the second half, cost inflation remains significant, and it is too early to predict how customers will adapt to ongoing changes in the market.’
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