Tesco raises UK store worker pay by 3.1 percent

LONDON (Reuters) - Britain's Tesco (TSCO.L) said it has raised pay for its supermarket workers by 3.1 percent to 7.62 pounds ($10.96) per hour, meaning it will give a significantly higher rate than the British government's new National Living Wage.

Under the government's new minimum wage rules due to start in April, the country's lowest paid workers aged over 25 must receive at least 7.20 pounds an hour, up from 6.50 pounds now.

Tesco, Britain's biggest supermarket group and the country's largest private sector employer, has seen its profit and sales hit by shifts in shopping habits and the rise of discounters Aldi [ALDIEI.UL] and Lidl [LIDUK.UL].

It said the new two-year pay deal would come into effect from July 3.

"We've agreed one of the highest pay and benefits packages in retail for store colleagues, and introduced a simpler and fairer pay structure," Tesco's UK CEO Matt Davies said in a statement on Tuesday.

Last August, the country's no.2 supermarket Sainsbury's awarded store staff a 4 percent pay rise, taking its standard rate of pay to 7.36 pounds per hour.

Tesco, which employs over 310,000 people in Britain, said the deal followed talks with union Usdaw and would apply to workers of all ages.

(Reporting by Sarah Young, editing by James Davey)