Photo: Majestic WIne
While there has been a great deal of recent discussion about raising starting wages at retail, Majestic Wine, the U.K.’s largest wine retailer, is focusing on store managers.
The emphasis comes as the retailer found store manager turnover had risen to 23 percent in 2015, up from 20 percent in 2014, 16 percent in 2013 and 14 percent during the two prior years. The rising attrition was making it "hard to maintain consistency" in a business relying on high customer-service levels, according to Majestic Wine.
Last fall, the retailer raised the annual salaries of its 213 store managers to an average of £30,000 ($42,800) from £28,000 ($40,000). A cap limiting bonuses to £1,000 ($1,425) was also scrapped in November, according to the Guardian.
Last week, Majestic Wine introduced a new long-term share incentive plan for the top 25 percent of staff, from store managers upwards. Shares will vest over three years, depending on Majestic Wine’s performance against a select group of peers.
Management set up a separate share incentive plan for other employees and overhauled the chain’s cash bonus scheme for all employees so that all payouts are based on the same factors.
According to Glassdoor, the average national salary for a store manager is $50,000. A new study from Cornerstone Research, University of Michigan and Stanford University found that retail wages overall were higher than some service jobs because "higher-quality workers" can earn much more than average as managers at larger retailers.
By comparison, store associate and cashier positions range from around $18,000 to $23,000, according to Glassdoor. The average annual turnover rate for retail overall is currently around 60 percent.
With many retailers raising entry-level wages, a recent Bloomberg article headline questioned why companies are: "Suddenly Desperate to Keep Their Least-Valuable Workers." Beyond benefiting from better productivity on selling floors from more experienced staff, the reason given for raising starting wages was to avoid the heavy training and recruitment costs involved in replacing employees.
- Naked Wines Investor Presentation – Majestic Wines
- Review of Remuneration Policies – Majestic Wines
- Majestic Wine raises store managers' pay in attempt to retain staff – The Guardian
- Do Large Modern Retailers Pay Premium Wages? – ILR Review
- Big-box retail work has its benefits – University of Michigan
- Why Retailers Are Suddenly Desperate to Keep Their Least-Valuable Workers – Bloomberg