With a staggering total sales value of £381million last year alone, the UK’s retail industry is enormous. In fact, according to research by Retail Economics, a market leader in economic statistical analysis, it is estimated that a third of all consumer spending in the UK is through the retail industry. The sector itself comprises of a range of businesses, from household names like Sainsbury’s and M&S to small, independent retailers typically only found on the UK highstreets.
Throughout July, retail expert Clare Bailey will be running a campaign for National Independent Retailer Month to highlight the importance of small, independent retailers in the local community and economy. It aims to connect small retailers with consumers in the local community as well as informing on the benefits of shopping with local retailers. As part of this campaign, a directory of independent UK retailers has been created with small businesses signing up and being listed free of charge, helping to connect them with local shoppers as well as provide them with regular social media promotion.
Retail is the UK’s largest private sector employer, with around 315,000 businesses employing a total of 4.5million people. Many of these businesses are large firms with thousands of employees, however many small businesses with only a handful of colleagues face a number of specific problems.
As of April 1st 2019, the National Minimum Wage increased by 4.9% from £7.83 to £8.21 for those aged 25 and over. This has directly impacted on the overall financial burden but also increased pressure to raise the salaries of their higher earners as well.
For many small retailers, these changes come on top of the existing struggle to keep costs low enough to ensure survival. It’s for this reason that this month’s National Independent Retailer campaign is so crucial.
Encouraging more customers back onto the high-street and away from shopping at the big name online and out of town stores is critical to ensuring small retailers survive, as the only way to combat a rise in costs is to create a proportionate rise in sales.
It is estimated that in the retail industry, employee turnover is at 60% each year, meaning that for the typical retailer over half of its employees leave the business annually. As a result, hiring & training costs are increased, there’s a fall in productivity as the employees that remain with the business take time out to interview applicants, and new employees joining the business will need to be trained and may have less experience than their predecessors.
A high churn rate is very detrimental for this cost conscious sector where maintaining low costs is essential to making a profit in a competitive business environment. Employee turnover is therefore arguably the most important problem faced by independent retailers today.
According to employment surveys from Willis Towers Watson, a global advisory company, 44% of employees in retail believe that they have to leave their job in order to advance their careers. This is backed up by research from Gallup that found that an astounding 93% of millennials employed in retail left their employer the last time they changed role.
As surprising as these results may be, they can be used to positively influence employee retention.
Employees often leave due to a lack of clarity over the opportunities available to them in their place of work. Ensuring that they know exactly what promotion opportunities are available, as well as how they can achieve them is likely to reduce the risk of them leaving. This method can be combined with mentoring schemes, where the most skilled employees in the business help to develop the skills of their less experienced colleagues, encouraging internal promotion opportunities while reducing the risk of employees looking elsewhere to advance their career.
Avoiding all turnover isn’t possible, but when employees do decide to the leave the business it provides a great opportunity to get feedback on where the company performs well, and not so well, in terms of keeping their employees happy. It is useful for all businesses to view themselves from their employees point of view, often gaining insight into how to improve the environment for its employees.
If you require any advice on retail-related legislation, HR or strategic advice, or to arrange a free initial consultation, call our Employment Law Consultants on 0161 603 2156.