Costa Coffee follows Pret a Manger with third staff pay rise in a year

Costa Coffee is to give its staff their third pay rise in a year, as rivals make similar moves amid a labour shortage.

The increase will apply to about 16,000 of Costa's UK workers.

The pay increase will be between 6.1% and 7.3% from 1 April, depending on experience and location.

Costa Coffee has around 1,520 company-owned branches across the UK.

The coffee chain said the increase meant that all its staff would be paid at least £10.70 per hour - up from £10 - and amounts to a year-on-year increase of around 14% by the time the pay rise is implemented.

The UK has been suffering a shortage of workers, attributed to long-term sickness after the pandemic and a lack of foreign workers to help fill available roles.

In response, companies have been raising wages in order to attract new staff and keep experienced ones.

UK workers have also been demanding higher wages as the cost of living continues to soar, with prices rising at the fastest pace for nearly 40 years. Many industries, including rail, the health service and Border Force, have staged walkouts in pay disputes.

Last month, Britain's biggest grocer Tesco agreed to increase its workers' wages by 7%, while Asda said it would raise pay by 10%. Aldi and Lidl have also announced pay increases.

Nick Orrin, Costa's interim UK and international managing director, said the pay rise would help staff who continue to live "during uncertain times".

Costa Coffee also said that staff will receive pay bonuses linked to store performance, which were previously rewarded in vouchers.