• Walgreens Boots Alliance plans to raise its wages for hourly workers in phases, with the goal of reaching $15 per hour by November 2022.
• The pay hikes will begin taking place in October.
• This comes as retailers sweeten wages and benefits in an effort to stay competitive in what has become a tight labor market.

Drugstore chain Walgreens Boots Alliance announced on Tuesday that it will raise its wages for hourly workers in phases, with the goal of reaching $15 per hour by November 2022.

Initial pay hikes will take place in October. Its current starting wage is $10 per hour, but the company said around half of its 190,000 hourly workers earn at least $15 an hour.

The move comes as retailers compete for workers in a tight labor market. Earlier this month, competitor CVS Health raised its minimum wage and took away its education requirements for workers. CVS plans to raise its hourly pay to $15 from $11 by July 2022, with phased increases starting as soon as this month.

Walgreens said it will cost $450 million over the next three years to increase its pay. About a third of those costs will be incurred in fiscal 2022. The drugstore chain said it expects it will be able to offset the impact of the investment in the normal course of its business.

"Investing in and rewarding our team members is not only the right thing to do, it's highly important to retaining and attracting a talented workforce, and to continuing to serve our critical role in community health care," said Walgreens CEO Roz Brewer in a press release.

The wage hike is one of Brewer's first initiatives since becoming CEO. Brewer, the former chief operating officer of Starbucks, recently named several top executives — including a newly created role, chief customer officer.

Shares of Walgreens rose more than 2% on Tuesday. The stock is up nearly 25% since the start of the year, putting its market cap at about $43 billion.

The company has added 25,000 full-time and part-time workers during the course of the pandemic.