Retailers pay high price for focus on back-room tasks

Retailers are wasting nearly 10% of wages by inefficiently assigning working hours to staff, costing them almost £2bn annually, research has found.

Conducted by global management consultancy Kurt Salmon Associates, researchers say the problem is made worse by lost sales due to the misplaced focus on storeroom tasks rather than helping customers – wasting both the time and money of all involved.

“Labour remains retail’s second largest cost after merchandise, but remains out of control for most companies,” said Sue Butler, a senior manager at Kurt Salmon Associates.

“Most retailers do not have a clear idea of how long it takes store staff to carry out specific processes and tasks,” she said, “so there is often no logic behind the number of labour hours allocated and those that are actually needed.”

Almost half of store staff hours are taken up by back-office support processes, frequently involving the duplication of tasks and inconsistent procedures, with retailers in grocery leading the way at 55% of store hours allocated to non-service tasks.

The firm estimates that a reduction in labour cost would increase profits by as much as 20%.

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