As wage cost pressures increase thanks to the living wage, 20,000 jobs have been lost in the convenience sector. How are retailers coping with this shift?

November 9, 2017
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Retailers React - Staff Levels

Retailers React – Staff Levels

As wage cost pressures increase, thanks to the living wage, 20,000 jobs have been lost in the convenience sector. How are retailers coping with this shift?

In a recent TRDP survey, we asked customers if they felt that they had enough staff employed, with just over half stating that they do not.

We decided to follow this survey up to find out why the other half do not feel this way and what obstacles they face.

We discovered that budgetary restrictions are a major reason for under-staffing, with 92% of respondents reporting a lack of money as their reason for their reluctance to hire new staff. A short-term solution that retailers have found for this issue is to work extra hours themselves, with 20% of retailers reporting over 70-hour work weeks.

We asked several customers for their opinions regarding these ongoing challenges, gaining an insight into how wages have impacted current business, staff levels and what methods are being used to retain existing employees.

Retailers React: Are living wage costs a threat?

In a recent TRDP survey, over 80% of respondents felt that cost increases from the Living Wage pose a threat to their convenience retail business. We spoke to retailers to find out more about this issue.

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Wharfedale Premier

Samantha Coldbeck is an award-winning retailer, owner of a successful establishment situated in Hull.

Samantha knows that with wage increases, she is under greater pressure to maintain her staff levels and make their opinions count, ensuring that everyone contributes to the success of the business.

We currently have 15 members of staff working for us, the majority of which are working part-time. We are doing more hours in the shop ourselves to cover the workload and customers do like to see management in the store. We find that working with the staff, setting staff expectations and embracing suggestions gives everyone the chance to contribute to the everyday success of the business. With the 4% living wage increase per year, our business growth has come to a halt. We just keep going month on month and deal with the impacts as we go along.”
Samantha Coldbeck – Wharfedale Premier

Collyweston Community Shop

With higher wages being paid to your staff, it’s reasonable to expect more from them. A great way that retailers have found to boost their productivity and teamwork is with training and mentoring.

Sandra Johnson at Collyweston Community Shop runs her business in a different way to others, hiring volunteers instead of paid staff. Sandra does not have the budget to pay for staff but believes that bringing people together and encouraging community cohesion is the key to running a successful business. While Sandra is not directly affected by wage increases, she puts substantial time and effort into mentoring and developing her people.

As a small community shop, we don’t have the budget to pay the staff required to keep the business open. What we do provide however, is extensive training on tasks such as using the EPoS system that not only gives our staff the means to do their jobs, but makes them more confident in using technology. In fact, for some of our staff, their shifts are the only opportunity they have to socialise with other people in the village and they really value this.”
Sandra Johnson – Collyweston Community Shop

Belle Vue Stores

One common worry for retailers is that they may have to reduce their staff levels to improve their profit.

Bay Bashir is a leading retailer with an optimistic view of increasing wages and has maintained his existing staff levels throughout. He believes that a higher wage bill can mean greater productivity and therefore, higher profits.

The great thing about paying your staff more is that you can expect more out of them. I don’t want my staff to just stand behind the till; I want them to be a positive presence while they’re at work and the living wage helps ensure that this happens.”
Bay Bashir – Belle Vue Convenience

Express Convenience Store

Despite the potential benefits of higher wages, many retailers are still apprehensive about changes on the horizon that may impact their ability to employ staff.

Simon Dixon is a successful business owner, and while he has his concerns about increasing wages costs, he continues to maintain his staff levels and puts the welfare of his staff as a priority.

We currently employ 14 members of staff who are well equipped and are good at motivating themselves alongside their supervisors and managers. We value our staff and organise outings to encourage a tight-knit environment which enhances loyalty and commitment to our business. All of our staff are from the local area, and many are related to one another. We are not looking forward to the rise of the minimum wage increase to £10, but for now, we will just have to take each day as it comes and hope profit isn’t affected in the long run.”
Simon Dixon – Premier Express Convenience Store

Despite job losses in the convenience sector and increasing wage pressures, many retailers are finding reasons to be positive. Recognising potential and investing in your people enhances knowledge and performance, making them more valuable members of staff.

A short-term investment in your people can result in long-term benefits for your business. Form an element of trust within your staff circle and feel reassured that you have a capable and stable team that you can depend on to help drive profits as costs go up.

Developing Your People – What to expect

We have been looking into the importance of staff development in stores. In a recent TRDP survey, over 40% of retailers reported that they do not offer any form of staff development. Is this a mistake?

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