Every little helps | Tesco workers receive £300 bonus amid booming profits - but are retailers capitalising on rising costs?

Tesco workers receive £300 bonus amid booming profits - but are retailers capitalising on rising costs?
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Tesco has announced some of its employees will receive a bonus of roughly £300 after taking in £2.3billion in profit.

With the cost-of-living crisis in full motion, Tesco has laid on thick the need for shoppers to join their Clubcard scheme, which gives them access to products at a reduced price.

This marketing has clearly benefitted the supermarket chain, as the £70million bonus will be divided between roughly 220,000 staff members as the supermarket chain saw its profit jump by 159% in the year to February.

This news comes after Tesco announced it would also be giving staff its highest ever pay rise – taking the hourly pay rate for shop staff from £11.02 to £12.02, which is above the Real Living Wage and signifies a 9.1% rise in base pay.

The store also announced plans to create around 2000 jobs in its technology and online teams. These desires have been echoed by numerous retailers, who want to stay ahead of the curve when it comes to technological developments and advancements in artificial intelligence.

Bonuses and the cost-of-living

Tesco’s recent bonus investment suggests the retailer feels that ensuring its profits trickle down to employees on the shop floor is an important thing to do and beneficial for the long-term success of the firm.

Ken Murphy, Tesco’s CEO, said: “This strong performance reflects the hard work of colleagues across the whole group, and their commitment to serving our customers.”

However, Murphy highlights that despite an increase in profits, many retailers have needed to absorb or hike up prices of goods due to the increased cost of many everyday products such as olive oil, chocolate and coffee.

Despite this, the retailer’s mammoth profits have garnered attention and criticism from the union Unite, who believe retailers like Tesco are capitalising off the cost-of-living crisis.

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“Tesco is raking in mountains of cash while families struggle to put food on the table because of sky high prices,” said Sharon Graham, Unite’s General Secretary. “Many companies have used the cost-of-living crisis to grab excessive profits. There is an epidemic of profiteering in our economy – the government has been missing in action and failed to curb it.”

In response, however, Tesco’s boss said that the firm is taking a “balanced approach” and paying “considerably more tax” than it was three years ago. 

Some other large companies - such as Uber, Apple and Sephora - have failed to adequately reward their staff remuneration in response to increased profits. This move from Tesco may serve as an example of how growth can be attributed to staff, and they can be sufficiently rewarded.

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