Tesco has become the latest supermarket to increase pay as retailers face up to the rising minimum wage and try to retain staff.
The hourly pay rate for store workers will rise from £11.02 to £12.02 in April, while pay for workers in London will rise to £13.15 an hour.
More than 200,000 staff will benefit from the increase, Tesco said.
All staff will get the voluntary Real Living Wage, which is higher than the compulsory National Living Wage.
The National Living Wage, often referred to as the minimum wage, is set to rise to £11.44 an hour in April 2024 - and for the first time will include 21 and 22-year-olds.
As a result, many of the major supermarkets have been announcing pay deals over the past few weeks.
Tesco now joins Sainsbury's, Asda, Aldi, Lidl and M&S in increasing its minimum pay for staff outside of London to £12 per hour.
Aldi's higher pay has been in place since the start of February, while Lidl and Sainsbury's increased wage began in March. M&S's pay rise will begin in April, while Asda will bring in an interim increase on 1 April to £11.44 an hour before raising the rate to £12.04 an hour from 1 July.
As well as raising pay, Tesco also said it would be increasing paternity leave to six weeks fully paid.
In addition, Tesco said it would increase maximum company sick pay entitlement to 18 weeks for eligible colleagues.
The supermarket has dropped separate pay rates for inner London and outer London employees to create one London Allowance, and it said the £13.15 per hour rate for this area meant it kept in line with the voluntary London Real Living Wage.
Daniel Adams, national officer at the shopworkers' union Usdaw, said: "This deal not only delivers an inflation-busting increase for Tesco employees, but it also demonstrates the value of progressive employers engaging constructively with trade unions at a time when the cost-of-living pressures continue to be keenly felt by our members."
Source: BBC
