Retail’s Other Problem: Too Few Clerks in the Store

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From The Wall Street Journal:

Many of America’s biggest retailers, under assault from Amazon.com Inc., have been slashing staff even faster than they have been closing stores, a dynamic that has left fewer clerks and longer checkout lines at remaining locations.

Despite operating roughly the same number of stores as it did a decade ago, Macy’s Inc. has shed 52,000 workers since 2008. At J.C. Penney Co., workers have disappeared twice as fast as department stores. That’s led to an average of 112 total Penney employees for every store today, down from 145 a decade ago, according to a Wall Street Journal analysis.

Similar per-store staff declines occurred over the Past decade at Kohl’s Corp., Nordstrom, Inc., Target Corp. and Wallmart Inc.,  regardless of whether the retailer opened or closed stores, according to the Journal’s analysis. The employment figures are for all full- and part-time staff and don’t distinguish between store, warehouse or headquarters workers. Industry executives say store employees make up the vast majority of retailers’ workforce.

“Retailers are shooting themselves in the foot trying to save pennies by lowering labor costs, and that’s costing them dollars on the top line,” said Rogelio Oliva, a business school professor at Texas A&M University. He recently analyzed the relationship between sales and labor at a women’s clothing retailer and found that many of the stores were understaffed by as much as 15%, leading to potentially lower sales.

. . . .

Now, some retailers are discovering they may have gone too far and are beginning to replenish staff—just as the booming U.S. economy is creating historic labor shortages and forcing companies to pay higher wages and offer perks such as better training and benefits.

. . . .

Now, some retailers are discovering they may have gone too far and are beginning to replenish staff—just as the booming U.S. economy is creating historic labor shortages and forcing companies to pay higher wages and offer perks such as better training and benefits.

. . . .

Dick’s Sporting Goods Inc. wants to increase store labor by about 10%, said Chief Executive Edward Stack, reversing a decadelong trend. Over the holidays, Dick’s added more cashiers, “because if there’s one thing that drives me nuts, it’s waiting at the register,” Mr. Stack said in an interview.

. . . .

Gilbert McGarvey has worked at the flagship Saks Fifth Avenue store in New York City for 24 years, most recently in the shoe department. “It used to be what we sold was service,” he said, “Now, they’ve cut that to the quick.”

Saks last year closed the service desk at its flagship store and reduced support staff, which has meant that sales associates now have to process returns and spend more time restocking shelves and fulfilling online orders, tasks that take them away from selling, Mr. McGarvey said.

. . . .

“If brick-and-mortar retailers can’t compete on price in an online environment, the only thing that allows them to survive is to provide a positive in-store experience,” said Stuart Appelbaum, the union’s president.

Jessica Tokarski recently stopped by a Target store in Orchard Park, N.Y., to buy a phone case. But the 23-year-old couldn’t find anyone to unlock it from the rack, so she left the store without making a purchase.

“I’ve turned to online shopping, because customer service in stores has gotten really bad,” Ms. Tokarski said.

. . . .

Over the past 12 months, 86% of U.S. consumers say they have left a store due to long lines, according to a survey conducted by Adyen, a credit-card processor and payment system. That has resulted in $37.7 billion in lost sales for retailers, Adyen estimates.

Link to the rest at The Wall Street Journal

Regular visitors to TPV will recall that Barnes & Noble implemented major staff cuts in its stores a few months ago.

PG suggests that if you want people to come to your store to shop for books or anything else, you should make the visit an enjoyable experience when they arrive. Unlike a competing retail establishment that may be located at the other end of the mall, Amazon is seldom farther away than the consumer’s purse or pocket.

11 thoughts on “Retail’s Other Problem: Too Few Clerks in the Store”

  1. It’s all retail. I have recently changed my food shopping habits because my go-to store seems to always have lines backing up into the aisles. They are part of a huge chain, while my replacement (which I have found has it’s own good attributes) is more locally owned. Funny, that.

    • I don’t go to Safeway much, but my last couple stops there have reminded me why I shouldn’t ever bother. Super long lines, even for the self-checkout. Very much, “Never mind, I don’t need this item that badly,” lines. The local places I usually go never have the same line problems the big chains do (or very rarely).

  2. Yes, I think this is a problem. It’s even worse when the people who are there aren’t paying attention to customers. I went into a store and wanted to get something in a locked case (electronics). There were two employees standing talking with each other like 20 feet away from me, and no other customers nearby. I tried to catch their attention from where I was standing and ended up having to walk up and interrupt their chat before one of them would help me.

    • Almost as if they’d rather we shop elsewhere – or online … 😉

      I myself love the fact that they even seem to be trying to make the self-checkout a pain.

      When Walmart/Sams first opened their self-checkouts the systems were smart enough to know that when you plugged in your CC you were done marking items and were ready to leave. They’ve since dummied down the systems to the point they can’t even tell a CC from a debit (something they never had a problem with before.) Add to that displays that you have to press a dozen times before it registers and needing someone to come over anyway because you’re buying beer or cold medicine (or to weigh the fruit) and I might as well shop elsewhere.

      It’s almost like they’re trying to get more people to avoid them so they can close down their businesses.

  3. The local Walmart super store has both grocery and other merchandise. They now have two self-checkout stations, one on each end of the store, with ten registers each.

    It has never been faster to get in and out of the store. They captured my grocery business because it is now so easy.

    I have watched the gradual migration of people from the regular checkout lines to self-checkout. Consumers are catching on very quickly.

    There seem to be three key factors. First the stations are easy to use. Second, the goods are marked, and flow through the stations. Third, Walmart has an employee at each end of the store to help people.

    • Wal-Mart seems to have several different self-checkout systems, judging from comments from people online. The system the local store put in has multiple panels. The touch screen on the near side of the register, down by your knee, has pictures of credit card logos. The small touch screen on the far side is where you select “credit” or “debit.” The large screen displays each item you swipe. There’s a box on a stalk on the near side for swiping a card.

      After spending at least fifteen minutes figuring out how the system might work (no directions, so it was “intuitively obvious” to some dimwit…) I determined it had no method for taking cash. Since I had no credit card, I walked out leaving everything on the belt. The cashiers who had refused to open a register didn’t seem to be concerned.

      Going there in the daytime, when the cashiers are apparently required to actually do their jobs, I’ve noticed that the poor suckers using the self-checkouts provide a fair amount of entertainment. Probably every third item they try to swipe elicits a loud “BRAAP!” and the red light on a pole by the register flashes…

    • Your experience is closer to mine.
      I wonder if it’s a function of *when* they installed the system. The one near me got it this year.

    • I love the self-checkout section. It was difficult at first, but the speed is worth it. And in one of our local Walmarts, they installed conveyor belts, just like the regular lines. I can unload the cart onto the belt, then let the groceries come to me as I scan and sack them. And because I have a vested interest in getting out of there as soon as possible, I’m going to scan my groceries as fast as I can.

      The only people I’ve seen using the cashier lanes are those whose carts are full enough that having someone else scan the groceries is a welcome break.

  4. Huge problem over here too. Including self checkouts.’Surprising item in the bagging area’ says one of our supermarkets, constantly. That would be a member of staff, perhaps. Haven’t been near our old and once much loved Boots store (pharmacy, toiletries, gifts, cosmetics) for more than a year. Shopping there is no longer a pleasant experience for all kinds of reasons and there are plenty of alternatives. Borders, in Glasgow, had been losing staff in the couple of years before it closed. Eventually they concentrated everything on the ground floor. I would arrive at the checkout with a basket of books, look at the massive queue, realise I was going to miss my train, and abandon them. Guess where I ordered them instead?

  5. As I used to say in my old job when the brain trust called for staff cuts – “if you make people wait when they are volunteering to give you money, you’re doing something wrong”

  6. I see this in more industries than just retail. Manufacturing also uses labor as the quickest lever to pull in order to protect bottom-line profitability, however, it causes more problems in employee burnout, loss of productivity, and loss of creative problem solving eventually eroding profitability in the long-term.
    There are numerous causes that probably can be attributed, but I believe that it has been the short-term thinking that has enabled this to grow.

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