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When the introduction of the National Living Wage in 2016 took away Jacqui Dales’ reputation for paying her staff higher wages, she hit upon a new strategy to get the best from her staff and her business
When the introduction of the National Living Wage in 2016 took away Jacqui Dales’ reputation for paying her staff higher wages, she hit upon a new strategy to get the best from her staff and her business. Alex Yau reports
For a quarter of a century, Jacqui Dales has run the kind of forward-thinking, community-centric local shop that customers love.
Her Spar London Road in Boston, Lancashire, might be just 1,000sq ft in size but it provides a tight, well-presented range of fruit, vegetables and chilled produce and has operated an in-store bakery ever since she took over the store in 1993.
A food counter – meanwhile – has offered freshly-made sandwiches since before most food-to-go-loving millennials were even born.
“There’s a pub and a Greggs nearby, but a lot of their products are ordered in. We can charge a bit more of a premium because we offer the freshest products in the area and shoppers are encouraged to visit us instead because they know they can get lottery tickets, medicine and other groceries, too.”
For years, Jacqui’s strategy for running the store profitably was to get the right staff and pay them well – it lowered staff turnover and ensured her team were always motivated to go the extra mile.
This approach worked well until 2016 when her £7.20 per hour rate became the legal minimum as part of the National Living Wage. “It’s added £11,000 in staff costs as the National Living Wage has gone up anyway and my margins would have shrunk further if I had increased my hourly wages above that rate,” she says.
Jacqui needed a plan and decided on a two-pronged approach.
One part of this was offering training. Her two most senior members of staff (she employs 26) were paid to take a business management NVQ at the nearby college at a cost of £500 each. Other members of staff, meanwhile, are encouraged and trained to take ownership of areas of the business.
“They’ve become their own experts in many ways. They have their own responsibilities and it really benefits the customers as well. Staff know more about the products and engage customers more as a result. Shoppers stay in the shop longer because it’s more enjoyable.”
And as the business benefits from this approach, Jacqui has been able to introduce the second part of her strategy: financial rewards. “Whether they’re a supervisor or shop assistant, everyone in my store has a target,” says Jacqui. “From making sure they create a relationship with 10 regular customers to meeting availability targets in each section, my staff feel like they can develop themselves more personally and prepare for a move into more senior roles at the store. They can earn a bonus of up to £500 by the end of the year if they hit their targets,” she says
These incentives have paid off. There has been a reduction in staff turnover in the last year, with no employee leaving the business, while availability levels across the shop are at 95%.
All this has led to weekly turnover increase of 7% year on year, crisps and snack sales growth of 30% and even tobacco sales are up by 2%.
For the first time in many years, however, her approach has also allowed Jacqui to take a step back from the everyday needs of the business. She has been left with time to coach staff on products, profit and margin, and customer service, for example. Jacqui, meanwhile, also now has the confidence that with work she can improve and grow her popular bakery offer. As of today, it already contributes a fifth of the overall store takings.
Could it even be that the National Living Wage has been a blessing in disguise?
“Before I’d spend most of the day ordering stock, managing the deliveries and making sure the standards were up to scratch on each area. Giving my staff more responsibility has given me the opportunity to look at the store from an overall perspective,” Jacqui says. “My mind is much clearer now.”
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