But BT’s offer to give each of its 58,000 UK workers a £1,500 rise, the biggest pay hike it has tabled in more than 20 years, was rejected as “insulting” by the Communications Workers Union (CWU). Usdaw said Tesco’s 5.8 percent offer, raising the hourly rate for shop and warehouse workers from £9.55 to £10.10, would help members cope with the cost-of-living crisis. Tesco said its biggest hourly pay rise for nearly a decade would also give delivery drivers and click-and-collect assistants £11 an hour.

In addition, its employee discount allowance will go up 50 percent to £1,500. It will give employees 10 percent off and 15 percent on payday weekends. The firm also agreed to boost training and ensure new contracts offer a minimum 16 hours a week.

Tesco’s UK and Ireland chief, Jason Tarry, said: “We are delighted to have reached an agreement with Usdaw that recognises the vital role our colleagues play in our business, now and in the future.”

Daniel Adams, of Usdaw, said the union was “pleased” to have secured a pay deal “at such a difficult time”.

However, the CWU is preparing to ballot members on strike action.

It says BT’s pay offer of three to eight percent is, on average, a real-terms wage cut of four percent.