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In these uncertain economic times one career path that could well have you going wild in the aisles is in the food sector. But what kind of remuneration might one expect from what is sometimes seen as a less glamorous segment of retail? Jason Ellis of Retail Human Resources provides the salary information and market perspective.
Despite having some of the highest profile names in the retail industry, despite employing many more people that other sectors, food retailing retains its reputation as being rather less glamorous than other parts of retail. The vast majority of the younger retail professionals seem to lean more towards the fashion or entertainment sectors than they do toward supermarkets.
Such professionals are doing their careers a major disservice both in terms of their future prospects for progression and earning potential.
Simply put, salary levels within the food sector are among the highest retail has to offer. What's more anyone who progresses to more senior management - either of a major retail unit or on a multi-site basis -can expect to earn a salary that would compare favourably with almost any industry. Such lofty salaries are not only available to the lucky few either; there are thousands of food retailers across the nation, each with their own management teams. Of course, like every part of retail, salaries in the food sector tend to be a function of turnover, square footage and headcount responsibility. As such convenience store professionals will not be pulling down the sort of salary that their local hypermarket manager earns. What they have got, however, is a clearly established career path with a fantastically wide choice of employers. The only area that comes close, monetarily speaking for managers, is the DIY sector. This sector is also characterised by large-unit operations but obviously contains fewer major players and thus has far fewer roles than food.
In terms of trends in salary levels over the last 12 months it should be little surprise to discover that there have been no dramatic shifts. While the food sector hasn't suffered the effects of the economic downturn anywhere near as much as others, it has still been a period of financial entrenchment and conservatism.
Some parts of the sector have, however, trialled new structures in their remuneration packages - with mixed success. In the discount sector, for example, some operators have looked at raising levels of basic salary while eliminating the bonus element of employees' remuneration. Others have trialled a performance-related pay rise scheme based on the performance of the individual store. By all accounts results for such initiatives have been mixed. Salary levels within the major food retailers (the so-called big four) have remained largely static.
Retail Ops: Supermarkets
| Turnover | Headcount | Min. | Max. | Typical | |
|---|---|---|---|---|---|
| Area Manager | £500m+ | 5,000 | 100,000 | 180,000 | 135,000 |
| Store Manager | £50m+ | 600+ | 60,000 | 90,000 | 70,000 |
| Store Manager | £35m-£50m | 350-599 | 50,000 | 60,000 | 55,000 |
| Store Manager | to £30m | to 350 | 42,000 | 50,000 | 48,000 |
| Deputy/Duty Mngr | £30m+ | 200+ | 32,000 | 42,000 | 37,000 |
| Dept Manager | - | to 50 | 23,000 | 30,000 | 28,000 |
| Supervisors | - | 10 - 20 | 15,000 | 20,000 | 18,000 |
Retail Ops: Convenience/Town Stores
| Turnover | Headcount | Min. | Max. | Typical | |
|---|---|---|---|---|---|
| Area Manager | £100m+ | 1,200 | £60,000 | £90,000 | £75,000 |
| Store Manager | 5m - 10m | to 60 | £35,000 | £45,000 | £38,000 |
| Store Manager | 2.5m - 5m | to 40 | £30,000 | £35,000 | £33,000 |
| Store Manager | to 2.5m | to 30 | £27,000 | £30,000 | £28,000 |
| Deputy/Duty Mngr | 5m - 10m | - | £25,000 | £33,000 | £28,000 |
| Deputy/Duty Mngr | 2.5m-5m | - | £22,000 | £25,000 | £22,000 |
| Deputy/Duty Mngr | to 2.5m | - | £16,000 | £22,000 | £18,000 |
Retail Ops: Wholesale
| Turnover | Headcount | Min. | Max. | Typical | |
|---|---|---|---|---|---|
| Area Manager | £150m+ | 400 | £75,000 | £90,000 | £80,000 |
| Store Manager | £50m+ | 100 | £50,000 | £75,000 | £60,000 |
| Store Manager | £20m - £50m | 50-100 | £40,000 | £55,000 | £45,000 |
| Deputy Manager | £50m+ | 15 | £35,000 | £45,000 | £39,000 |
| Deputy Manager | £20m - £50m | 5-10 | £28,000 | £40,000 | £30,000 |
| Department Managers | All stores | £20,000 | £30,000 | £24,000 | |
| Supervisors | All stores | £15,000 | £20,000 | £18,000 |
Retail Ops: Discount/Value/Forecourt Retailers
| Turnover | Headcount | MIn. | Max. | Typical | |
|---|---|---|---|---|---|
| Area Manager | 20m+ | 150+ | £38,000 | £50,000 | £43,000 |
| Store Manager | 5m+ | 15-30 | £30,000 | £50,000 | £35,000 |
| Store Managers | 1m-5m | 10-20 | £23,000 | £30,000 | £28,000 |
| Deputy Manager | 5m+ | - | £20,000 | £25,000 | £22,000 |
| Deputy Managers | 1m-5m | - | £15,000 | £20,000 | £26,000 |
| Supervisors | All stores | - | £10,000 | £18,000 | £12,000 |
In terms of benefits packages within the food sector, for middle management it is the usual suspects. On top of basic salary there are better bonus schemes within this sector, which have been enhanced over the last two to three years. The sector used to have a reputation for not paying the best bonuses but this perception has changed in the main.
The average maximum bonus potential is around the 20% mark meaning there are some considerable bonuses being paid out in the sector currently. When you move into the more senior positions, i.e. store management of big four supermarkets and area management, you tend to be given either a car or car allowance. The senior-level roles also often command some form of share or dividend payout - sometimes termed 'golden handcuffs' - designed to incentivise candidates to stay with the business for a given period of time (usually three to five years). These can be very lucrative indeed.
Another benefit which seems to be coming back into the market within a lot of retailers is a location, travel or fuel allowance. It is a benefit that a lot of candidates do not realise contributes a significant amount to their overall salary until they actually sit down and figure out exactly how much they earn. The big four supermarkets still on the whole pay out a premium to candidates for working on Sundays which is a benefit that is becoming less and less commonplace in the sector.
Where recruitment activity is concerned, the food sector did not need to pull up the gangplank during the economic storm. Recruitment certainly slowed but rarely did operators in this sector resort to the outright recruitment freezes seen elsewhere. Most in fact carried on with their expansion programmes and snapped up the management talent that came onto the market in the wake of recession-induced retail closures. Indeed the 'hard discounters' such as Lidl and Aldi performed particularly well with even the hardest economic times having seemingly zero impact on the growth of their store portfolios.
Graduate/fast-track schemes have of course been affected over the last 18 months as many have either dramatically reduced or stopped all together. The numbers of graduates or fast-track retail managers taken on by retailers dropped off due to cost cutting measures. But the industry has now come full circle. Those that have not brought in internal talent to train and develop have had their succession plans somewhat compromised. The knock-on effect has been a dramatic increase in external recruitment over the last nine months or so. Companies have now realised that they need to work on the internal succession; therefore graduate schemes are now very much at the heart of this. This is likely to mean that 2011 could be a great year for graduates looking for careers in retail.
Since February last year the market has warmed and woken up across all sectors. Due to a lack of internal development of staff and external recruiting this has left many retailers outside of the food sector very short of numbers coming through the ranks - particularly where candidates have started moving to different retailers. This has in turn started the cogs moving and meant that many companies that hadn't been recruiting have been forced into external recruitment and have had to make cost cuts in other areas of the business.
Right now there is a lot of talk about the impact of the coalition Government's austerity measures and the VAT rise on the retail industry. Thus far there are no signs such fears have started to affect salary levels or recruitment activities - but clearly it is very early days for any economic effects to filter through. Irrespective, the fact is supermarket retail is not an industry driven by impulse-buying - people will always need to eat! The likes of electrical retail will be hit harder with the rise in VAT etc.; indeed most retailers are advertising that they will pay the VAT on the ticket price of purchases to encourage continued spending. Food retail is a necessity. The challenge for all food retailers is to balance brand name, quality and price perception to develop market share.
So what are the prospects for retail professionals looking to move into or progress their careers in food retail in 2011? Well, the food sector is becoming easier and easier to enter. This is largely down to the fact that most of the major players sell far more than food now. The big guns have all moved into non-food in a big way, stocking vast selections of clothing, electrical goods and homewares. This in turn means that candidates coming from these backgrounds are much more sought after.
The perception that candidates need to have worked in food is inaccurate for the more middle management roles - at a department or deputy manager level. The more senior roles - i.e. store management of the major supermarkets or area management of the convenience sector - still tend to require candidates to have relatively recent food experience. What it does mean on the whole is if you are looking for a change in career in early 2011 then the best place to look would be food retail.
This is a pretty big claim but, again, look at the facts: it is reported in some quarters that food retail makes up to 40% of the retail market. It is a sector that is as close to being economically bullet-proof as retail can offer. It is the sector of retail that has the highest percentage of employers across the sector meaning there are more opportunities for progression. It is the sector that pays the highest basic salaries and overall packages. You get the idea.
The salary data included in this survey comes from RHR's database of more than 250,000 candidates. As ever with surveys the figures are by their nature generalisations, with location and individual company policies varying across the industry. That said the provision of a median or typical salary level provides a reasonable guide.
