the grocery industry?
Steve Hemsley reports
Sir Clive Woodward’s desire to test his skills in the world of soccer after guiding the England rugby team to World Cup glory will strike a chord with some of the country’s most talented retail managers.
Sir Clive is convinced the technical and coaching practices he employed with the oval ball could be adapted and applied to the round ball game. He is probably right. And, like many store managers working across various retail sectors, he does not want to be pigeon-holed and the assumption made that his talents cannot be adapted to a different, but similar, role.
You do not have to spend too long talking to experts in recruitment and human resources to discover food retailers have suffered in the past from a closed-mind attitude when it comes to utilising the skill sets of senior store managers from other retailers. Yet as the supermarkets’ share of non-food sales has soared, they have been forced to cast their recruitment net much wider to find talented managers of the future. Of course, recruiting store managers from non-grocery backgrounds has meant a steep learning curve for everyone. The different volumes involved between food and non-food categories, the speed at which some lines leave the shelves and the logistics of sourcing, storing and supplying many items, such as electronics, can require a significant amount of hand-holding for managers in the early months.
Unfortunately, the supermarkets are discovering the talent pool is not as deep as they would like. There are still concerns over whether someone who has run an out-of-town electrical multiple could handle the fast-moving and price-sensitive world of food, while the differences in the retail and employee cultures between department stores and grocers can be too difficult for some senior people to overcome.
“In reality, there is only a small group of people who can cope with the modern-day supermarket store profile, so the grocers need recruits with experience in non-food who can implement best practice in these new areas as quickly as possible,” says James Bass, manager of Retail Professionals, a division of recruitment, retention and development consultancy PRO.
He adds: “The modern grocery format needs this external expertise in its management team to get to the next level and the struggle to find the people they need is fuelling a new talent war between retailers from all sectors as every company wants to hold on to its best people.”
The supermarkets not only want people with a depth of knowledge of non-food. They increasingly need the executives they recruit to be effective business managers at store level. This means candidates for any senior post must be able to demonstrate they can oversee a team of specialist category managers employed beneath them, and who themselves may have been recruited from various backgrounds.
Simon Hayton a co-director at Imagine Recruitment, says: “The grocers must keep a complete open mind about where the next generation of managers will come from. It is no longer the case that a Sainsbury manager will move to Tesco and vice versa. The clever employers are looking at recruiting from companies in the leisure sector such as Whitbread or Costa Coffee, or from call centres - basically, from anywhere where senior people are skilled in customer service and in winning repeat business.”
The fiercely competitive nature of this end of the business is expected to drive up salaries by as much as 10% during 2005, although grocery chains may be able to resist any large-scale clamour for more money from their managers because of the strength of the various supermarket brands and their reputation as good employers.
Although the supermarkets have to search hard for people with the complementary skill sets they need there is no shortage of applications for store manager posts when they arise. Managers of large-format retailers such as Matalan, Gap or Ikea can reach a crossroads in their careers when looking for their next step up and can feel the need to look to grocery to progress professionally. These store groups, plus others such as Woolworths and Debenhams, are predicted to provide an increasing number of grocery managers over the next few years.
One supermarket is understood to be already fast-tracking non-grocery management talent. Its new 36-week training programme launched in the final quarter of 2004 has attracted graduates and executives from the hospitality, leisure and other customer-facing industries.
The move by the supermarkets into other non-traditional areas such as banking and insurance has also created a need to recruit senior people with knowledge of specialist areas. However, these employees tend to be based at head office.
The excellent management training provided by the supermarkets means there will always be movement in the other direction, too, with people leaving grocery to manage stores in other retail sectors. The growth in out-of-town developments has tempted grocery managers to try their hand at running specialist retailers on large retail parks, for instance, while a manager of a small supermarket outlet may decide he or she wants to be part of an emerging retail company which has demonstrated strong growth potential.
“There are many reasons why managers decide to move out of grocery. They might not see the career development path they want or they make a trade off to improve their quality of life and move to a job closer to their home,” says Bass. “People will often switch to a retail brand they believe in or have an affinity with through a personal interest, such as Halfords or Mothercare.”
Employing senior people who do not have a grocery background is not the risk it once was. Instead it is an opportunity to bring fresh ideas into the business and create a management team with the breadth of skills and product knowledge essential in such a competitive retail environment where non-food is increasingly important.
The real challenge is actually finding these talented managers of tomorrow - wherever they are.
>>Some of the most effective people managers come from outside food retail
Waitrose’s retail strategy has remained focused on food despite the rise in non-food sales at its rivals, yet it still searches far and wide to find the best store managers.
Its head of training and management development, John Doughty, says only around 10% of its managers are recruited from rival supermarkets because the company has discovered that some of the most effective people managers come from other walks of life.
“We find some of the best recruits come from the armed forces or from hotel and catering management, or even from the banking sector. We are looking for people who are skilled in leadership but who can also demonstrate a passion for food.”
Waitrose has been part of the John Lewis Partnership since 1937 and the company attracts hundreds of applications every year from people tempted by its corporate culture. It currently has around 100 people at various stages on its management training programme.
“Many senior people like what the organisation stands for and if we had to choose between two people with the same experience we would look for the person with the most motivation because food retailing is a highly productive sector, but it must be sold in an innovative way,” says Doughty.
He adds that once managers join the company, few want to leave. He estimates that in the last five years, only six have left to join other supermarkets. “The secret is to offer people a structured career path and work with the managers to ensure they continue to develop,” he says.