It’s an industry groaning under ferocious price pressures, but salaries compare very favourably with other sectors. Glynn Davis reports on the third annual salary survey for The Grocer by Croner Reward
Much media coverage of the food sector revolves around margins being eroded amid fierce competition for listings on supermarket shelves and market share being fought over as prices are continually reduced. But this has not had a detrimental effect on salaries, as shown by the third annual salary survey carried out exclusively for The Grocer by Croner Reward.
Compared with last year, the survey is even more representative of the food industry as the number of responses collated in the database has been increased by well over 100%. These responses were acquired from a questionnaire sent out to a wide variety of food retailers, suppliers and wholesalers.
The industry offers competitive packages compared with other sectors. Salaries in financial services might be up to 26% higher for director-level jobs, but pay in the food sector compares very favourably at senior/ middle manager rank where it is 5.7% higher than the average salary across all sectors. And it pays 12.5% above the average salary for jobs in other forms of manufacturing at the equivalent managerial level. For junior manager roles, the basic salary is 5.4% above the average pay across all sectors.
Vivienne Copeland, director of client services at Croner Reward, says: “Salaries are not as low as rumour would have you believe. People have felt it is not a good sector to move into but there are opportunities below the top level. Even so, the salaries maybe do not continue as they should into the more senior jobs.”
But this perspective only takes into account the basic salary. To gain the full picture, it is necessary to consider the overall packages because bonuses are again a strong part of the mix, continuing the trend seen in last year’s survey.
“Bonuses have gone up quite a bit again. There are some beefier bonuses being paid. And basic salaries have stayed just as strong. Generally employees are employing better performers,” suggests Copeland.
Kevin Hawkins, director general of the British Retail Consortium, agrees there is a focus on performance bonuses and believes this is good for the industry. He says it is sensible to reward better performers with large payments as it is a very competitive industry where the chance of failure is increasing. “Not everybody is going to get a bonus of £20,000. To achieve a full bonus is more demanding than before,” he says.
Indicative of how bonuses have become a serious part of remuneration is the £20,000 bonus available to general managers of hypermarkets - five times last year’s level and taking the full package for some to £85,000.
The trend can also be seen at supermarket store manager level where the bonus is £3,600 compared with £1,500 last year. For area managers there is the chance to earn a bonus of £4,000 against £2,500 last year.
These bonus levels also translate through to head office jobs with both senior buyer and category manager now enjoying significantly higher potential bonuses. Senior buyers have the opportunity to increase their salaries by as much as 25% if they qualify for the full bonus. Hawkins says this reflects the fact that “buying well and doing good deals” is crucial to success in all businesses today.
In the retail sector, an important contributor to the size of bonus for managers is the size of their store. For the managers of the largest stores, the bonus amounts on offer are sizeable. Hawkins says the calibre of manager needed to run one of today’s massive hypermarkets is very high as they are basically running a small business with - at the Tesco Extra end - sales likely to be running at £100m-plus per year.
Copeland believes the survey shows that the supermarkets in general “do pay the money”.
And there is not a massive difference between a section manager within the multiples and a store manager of a CTN (£22,300 compared with £28,000).
This is the area where people cut their teeth in the supermarkets and is probably
the domain of graduate trainees: “The high flyers would then move on but £22,300 is not unattractive at this level.”
Some retailers, such as Tesco, prefer to develop their store managers internally but Russell Adams, manager of retail at major recruitment company Michael Page, says there are many good opportunities for the best people to move up. “This is a fantastic market for young managers in their early 20s who might be managing a c-store as they can move through all the food retailers. They can increase their salary from £25,000 to £75,000 across a number of years,” he says.
The size of the organisation has much less impact for the middle level and below. For a middle manager, salaries are consistently around £30,000, regardless of the size of the company. At a business with turnover of less than £3m a year the salary would be £35,000 and where sales hit more than £500m the average salary falls to £30,000. “Below senior manager level, jobs are more affected by location than they are by the size of the company. It’s less of an issue as employers can look in the local market to fill vacancies,” says Copeland.
For the role of senior manager there is more of an impact for those people working in large organisations - but only to a certain extent. As the size of company goes over 500 employees, then the salary levels start to level off because the larger businesses would have many more job types that could be classified as ‘senior manager’.
The survey shows that for a senior manager in an organisation with fewer than 100 people, the salary is £30,400, which rises to £57,750 for a company with 201-500 employees. But it then falls to an average of £40,000 for companies with a workforce of more than 10,000 people.
Where there is the most marked difference between size of company and the salary available is at the very top end because it is unlikely that the managing director of, say, Masterfoods is going to be on £74,120, which is the average salary level for this role, according to the survey.
The location of the company has a bearing but London was not “streets ahead
of everywhere else”, according to Copeland. The highest salaried area is the north west, where directors can expect to receive £62,406. London trails in at £55,720, the same as Scotland and Northern Ireland. Copeland suggests this might have been a result of the manufacturing industry skewing the numbers as most of it is based outside London. Also, with pressures on margins in the capital, retail employers might have abandoned paying London rates to their store managers. In addition, there may be a high level of head office jobs in London that also pulled down the average salary levels.
There may have been a possible skewing of the numbers for the salaries and bonuses within the food manufacturing sector, with respondents from the mid-tier (where the industry is very fragmented), which would have also brought down the average salary levels. The survey shows that a works/factory manager was last year able to earn a bonus of £10,000 but for the current year this has fallen to £3,690.
The manufacturing sector has, nevertheless, matched retail for pay rises. Like most sectors, it has delivered pay rises of 3%, which have become the norm for a number of years. The exception is wholesaling where employees had only a 2.8% increase last year. But for next year the sector is expected to join most other industries with a 3% rise.
With such a limited upside on basic salaries across the food industry, Hawkins believes that, short of a promotion, the only way for employees to significantly increase their incomes is to qualify for a bonus.
However, employers are increasingly including various other benefits into their packages such as child care vouchers, career breaks, after-school care and paternity leave.
Tony Morgan, head of flexible benefits at KPMG, says that 10 years ago flexible benefits were an expensive addition to a package but the market has changed as a result of benefits being exempt from income tax and National Insurance contributions. This enables both employer and employee to make a saving with a variety of benefits.
Morgan says all seven of the major retailers he deals with are now looking closely at benefits packages as a method of reducing costs. “There is a move away from the standard package. The old model was salary and life cover, but employees are now looking for richer packages but at less cost to them. Employees can nowadays mix and match basic and benefits,” he says.
For the food manufacturers, especially, Morgan says benefits packages are proving a successful way to differentiate themselves from their rivals and boost recruitment.
Even company car schemes are making a return to the fold. But the modern-day variant
involves car allowances rather than the keys to a vehicle. “Schemes are now being put in place but with employees now given a car allowance because cash is now seen as better by many people,” says Morgan.
Adams has seen much evidence of the rise of flexible benefits and cites Tesco employees as having benefited from the company’s share options scheme, which has proved particularly fruitful as a result of the continued rise in the company’s share price.
Over the past year, the wholesaling sector has shown the most impressive adoption of benefits with 29% of employees having the option of a career break. Paternity leave is now available to 80% of people in wholesaling, compared to 60% last year.
Copeland says after-school care is offered to 1% of employees across the food sector compared with 0.3% last year. “Employers are offering a better work/life balance.”
Nevertheless, Copeland points out that employers want their pound of flesh in return for the benefits and extra bonuses, such as increased demands to work outside normal hours. As many as 50% of people are being asked to work extra hours.
There is generally a high level of job security within the food sector. The average is 57% of people surveyed, and for retail this rises to 63%. The lowest level is in wholesaling with 44% enjoying job security.
As many as 30% of people are looking to change jobs, and for retail this was 40%. Copeland says: “Even though they are secure, that’s not enough for many people. They need to progress or go for more money. But this does not mean a move outside the sector as there is a lot of moving around in companies in the food industry.”
For many, however, it can easily mean a move beyond the confines of the food industry. This could be more common in food retail since the continued consolidation among the grocers and c-stores has reduced the number of companies.
Mark Flesch, operations manager at Retail Human Resources, says the sophistication of the food retail sector has resulted in its employees now being highly prized assets in the broader retail market: “The supermarkets are big businesses with considerable resources for training and development, so their employees are highly prized. Their skills are transferable into non-food.”
He says food retailing has probably never been as attractive an employment opportunity as it is right now. Hawkins agrees and believes that, for the right people with strong career aspirations, there are great opportunities available. “If you do not like competition, then don’t even think about retail. There are obvious rewards for good performance, but it is quite a tough job. If you’ve got the killer instinct, then the retail sector will do for you,” he says.
interpreting the figures
The salaries and bonuses listed are averages of the figures given by each group that responded.
As the number of people receiving bonuses was not always the same as the number receiving salaries, the average packages listed may not be the sum of the salaries and bonuses.
The responses to the salary survey, carried out by Croner Reward, the pay and benefits specialist, included employers across the food and drink sector.
Readers of The Grocer can obtain a full copy of the survey for the reduced price of £350 (normal price £500) from the end of June.Contact Croner Reward customer services on tel: 01785 813 566 or email: enquiries@croner-reward.co.uk
Much media coverage of the food sector revolves around margins being eroded amid fierce competition for listings on supermarket shelves and market share being fought over as prices are continually reduced. But this has not had a detrimental effect on salaries, as shown by the third annual salary survey carried out exclusively for The Grocer by Croner Reward.
Compared with last year, the survey is even more representative of the food industry as the number of responses collated in the database has been increased by well over 100%. These responses were acquired from a questionnaire sent out to a wide variety of food retailers, suppliers and wholesalers.
The industry offers competitive packages compared with other sectors. Salaries in financial services might be up to 26% higher for director-level jobs, but pay in the food sector compares very favourably at senior/ middle manager rank where it is 5.7% higher than the average salary across all sectors. And it pays 12.5% above the average salary for jobs in other forms of manufacturing at the equivalent managerial level. For junior manager roles, the basic salary is 5.4% above the average pay across all sectors.
Vivienne Copeland, director of client services at Croner Reward, says: “Salaries are not as low as rumour would have you believe. People have felt it is not a good sector to move into but there are opportunities below the top level. Even so, the salaries maybe do not continue as they should into the more senior jobs.”
But this perspective only takes into account the basic salary. To gain the full picture, it is necessary to consider the overall packages because bonuses are again a strong part of the mix, continuing the trend seen in last year’s survey.
“Bonuses have gone up quite a bit again. There are some beefier bonuses being paid. And basic salaries have stayed just as strong. Generally employees are employing better performers,” suggests Copeland.
Kevin Hawkins, director general of the British Retail Consortium, agrees there is a focus on performance bonuses and believes this is good for the industry. He says it is sensible to reward better performers with large payments as it is a very competitive industry where the chance of failure is increasing. “Not everybody is going to get a bonus of £20,000. To achieve a full bonus is more demanding than before,” he says.
Indicative of how bonuses have become a serious part of remuneration is the £20,000 bonus available to general managers of hypermarkets - five times last year’s level and taking the full package for some to £85,000.
The trend can also be seen at supermarket store manager level where the bonus is £3,600 compared with £1,500 last year. For area managers there is the chance to earn a bonus of £4,000 against £2,500 last year.
These bonus levels also translate through to head office jobs with both senior buyer and category manager now enjoying significantly higher potential bonuses. Senior buyers have the opportunity to increase their salaries by as much as 25% if they qualify for the full bonus. Hawkins says this reflects the fact that “buying well and doing good deals” is crucial to success in all businesses today.
In the retail sector, an important contributor to the size of bonus for managers is the size of their store. For the managers of the largest stores, the bonus amounts on offer are sizeable. Hawkins says the calibre of manager needed to run one of today’s massive hypermarkets is very high as they are basically running a small business with - at the Tesco Extra end - sales likely to be running at £100m-plus per year.
Copeland believes the survey shows that the supermarkets in general “do pay the money”.
And there is not a massive difference between a section manager within the multiples and a store manager of a CTN (£22,300 compared with £28,000).
This is the area where people cut their teeth in the supermarkets and is probably
the domain of graduate trainees: “The high flyers would then move on but £22,300 is not unattractive at this level.”
Some retailers, such as Tesco, prefer to develop their store managers internally but Russell Adams, manager of retail at major recruitment company Michael Page, says there are many good opportunities for the best people to move up. “This is a fantastic market for young managers in their early 20s who might be managing a c-store as they can move through all the food retailers. They can increase their salary from £25,000 to £75,000 across a number of years,” he says.
The size of the organisation has much less impact for the middle level and below. For a middle manager, salaries are consistently around £30,000, regardless of the size of the company. At a business with turnover of less than £3m a year the salary would be £35,000 and where sales hit more than £500m the average salary falls to £30,000. “Below senior manager level, jobs are more affected by location than they are by the size of the company. It’s less of an issue as employers can look in the local market to fill vacancies,” says Copeland.
For the role of senior manager there is more of an impact for those people working in large organisations - but only to a certain extent. As the size of company goes over 500 employees, then the salary levels start to level off because the larger businesses would have many more job types that could be classified as ‘senior manager’.
The survey shows that for a senior manager in an organisation with fewer than 100 people, the salary is £30,400, which rises to £57,750 for a company with 201-500 employees. But it then falls to an average of £40,000 for companies with a workforce of more than 10,000 people.
Where there is the most marked difference between size of company and the salary available is at the very top end because it is unlikely that the managing director of, say, Masterfoods is going to be on £74,120, which is the average salary level for this role, according to the survey.
The location of the company has a bearing but London was not “streets ahead
of everywhere else”, according to Copeland. The highest salaried area is the north west, where directors can expect to receive £62,406. London trails in at £55,720, the same as Scotland and Northern Ireland. Copeland suggests this might have been a result of the manufacturing industry skewing the numbers as most of it is based outside London. Also, with pressures on margins in the capital, retail employers might have abandoned paying London rates to their store managers. In addition, there may be a high level of head office jobs in London that also pulled down the average salary levels.
There may have been a possible skewing of the numbers for the salaries and bonuses within the food manufacturing sector, with respondents from the mid-tier (where the industry is very fragmented), which would have also brought down the average salary levels. The survey shows that a works/factory manager was last year able to earn a bonus of £10,000 but for the current year this has fallen to £3,690.
The manufacturing sector has, nevertheless, matched retail for pay rises. Like most sectors, it has delivered pay rises of 3%, which have become the norm for a number of years. The exception is wholesaling where employees had only a 2.8% increase last year. But for next year the sector is expected to join most other industries with a 3% rise.
With such a limited upside on basic salaries across the food industry, Hawkins believes that, short of a promotion, the only way for employees to significantly increase their incomes is to qualify for a bonus.
However, employers are increasingly including various other benefits into their packages such as child care vouchers, career breaks, after-school care and paternity leave.
Tony Morgan, head of flexible benefits at KPMG, says that 10 years ago flexible benefits were an expensive addition to a package but the market has changed as a result of benefits being exempt from income tax and National Insurance contributions. This enables both employer and employee to make a saving with a variety of benefits.
Morgan says all seven of the major retailers he deals with are now looking closely at benefits packages as a method of reducing costs. “There is a move away from the standard package. The old model was salary and life cover, but employees are now looking for richer packages but at less cost to them. Employees can nowadays mix and match basic and benefits,” he says.
For the food manufacturers, especially, Morgan says benefits packages are proving a successful way to differentiate themselves from their rivals and boost recruitment.
Even company car schemes are making a return to the fold. But the modern-day variant
involves car allowances rather than the keys to a vehicle. “Schemes are now being put in place but with employees now given a car allowance because cash is now seen as better by many people,” says Morgan.
Adams has seen much evidence of the rise of flexible benefits and cites Tesco employees as having benefited from the company’s share options scheme, which has proved particularly fruitful as a result of the continued rise in the company’s share price.
Over the past year, the wholesaling sector has shown the most impressive adoption of benefits with 29% of employees having the option of a career break. Paternity leave is now available to 80% of people in wholesaling, compared to 60% last year.
Copeland says after-school care is offered to 1% of employees across the food sector compared with 0.3% last year. “Employers are offering a better work/life balance.”
Nevertheless, Copeland points out that employers want their pound of flesh in return for the benefits and extra bonuses, such as increased demands to work outside normal hours. As many as 50% of people are being asked to work extra hours.
There is generally a high level of job security within the food sector. The average is 57% of people surveyed, and for retail this rises to 63%. The lowest level is in wholesaling with 44% enjoying job security.
As many as 30% of people are looking to change jobs, and for retail this was 40%. Copeland says: “Even though they are secure, that’s not enough for many people. They need to progress or go for more money. But this does not mean a move outside the sector as there is a lot of moving around in companies in the food industry.”
For many, however, it can easily mean a move beyond the confines of the food industry. This could be more common in food retail since the continued consolidation among the grocers and c-stores has reduced the number of companies.
Mark Flesch, operations manager at Retail Human Resources, says the sophistication of the food retail sector has resulted in its employees now being highly prized assets in the broader retail market: “The supermarkets are big businesses with considerable resources for training and development, so their employees are highly prized. Their skills are transferable into non-food.”
He says food retailing has probably never been as attractive an employment opportunity as it is right now. Hawkins agrees and believes that, for the right people with strong career aspirations, there are great opportunities available. “If you do not like competition, then don’t even think about retail. There are obvious rewards for good performance, but it is quite a tough job. If you’ve got the killer instinct, then the retail sector will do for you,” he says.
interpreting the figures
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