Retailers cutting staff and opening hours to offset extra wage costs are at risk of losing their USP, industry bosses have warned.
The caution from Today’s Group retail director John Kinney and Conviviality chief operating officer Amanda Jones, comes as an RN poll revealed 50% of retailers have cut staff hours following the introduction of the National Living Wage in April.
“When you ask retailers ‘how are you manging the cost of the National Living Wage?’, the majority say I am cutting back on hours. That’s a worry if they’re doing the wrong action to address that cost,” Mr Kinney said. “In many cases the point of difference independents have over the multiples is we know our customers, so there is a danger if we lose that USP.”
He said retailers should be using their EPoS data to review their range, exploring if there is an opportunity to introduce more premium products and look at other costs their business incurs to offset the increased wage costs and protect their point of difference.
The Association of Convenience Stores’ 2016 Local Shop Report also revealed three of the top six drivers to stores were friendly and helpful staff, local staff who know me and long opening hours. The report predicts the overall market will continue to grow.
Ms Jones said: “I hear about a lot of independents having to cull hours, not because they think it’s commercially right, but because they can’t afford it because they have to cut costs somewhere.
“That for me is a real risk. It’s potentially detrimental to the customer.”
Blake Gladman, him! research director, added: “The gut reaction is to reduce staff hours and staff numbers, yet we know they are very important in convenience. The danger is if you strip that away you lose your rawness and USP. It should be where retailers are investing.”
Baz Jethwa, of Costcutter in Farnworth, agreed with the caution, stating if the quality of his hot food, which is his USP, starts to slip because of a reduction in staff hours he would quickly lose sales.