By: Andy Harig, Vice President, Tax, Trade, Sustainability & Policy Development, FMI
When the legendary CEO of General Electric, Jack Welch, was asked to explain his management philosophy, he knew straight where to go, “What’s important in the grocery store is just as important in engines or medical systems. If the customer isn’t satisfied, if the shelf isn’t right or the offerings aren’t right, it’s the same thing. You manage it like a small organization. You don’t get hung up on zeros.”
Jack Welch knew what our industry gets right, and his message is as true today as it was then – it is all about the fundamentals.
A recent publication by the U.S. Bureau of Labor Statistics’ (BLS), Beyond the Numbers, focuses on the state of grocery stores and amply proves this point. The report found that – despite the forces transforming the retail sector - our industry’s fundamentals and role in shaping the workforce remains strong.
Grocery stores are community hubs that facilitate personalized experiences in the aisles for consumers and bring impactful programs into the neighborhoods they serve. The food retail industry accounts for $680 billion of the $5.3 trillion in total retail sales. Despite this robust figure, our industry continues to operate on a 1% profit margin, among the lowest of any major economic sector. It takes a well-developed and talented workforce for an industry to serve its customers and thrive in this environment. How do we do it?
Fundamentals:
- FMI’s Food Retailing Industry Speaks 2019 report finds nearly 22% of supermarket profits goes back into payroll and employee benefits.
- According to BLS, employment in food retail held strong at 16.3% of the 16.7 million total retail trade sectors in 2018.
- Food retail maintains the strongest labor compensation as share of income in the entire retail sector.
The retail evolution shows no sign of slowing down - nor does the pace of our investments in the workforce. Speaks 2019 shows the industry plans to make labor investments in online purchase fulfillment and delivery experts, data analytics/data technologist, in-store experience experts, and professionals to help shoppers eat well in the next two years.
Numbers don’t lie. The food retail industry knows where its strength lies and is making the investment in upgrading skills and technology to develop the workforce of the future. When it comes to our business model, nothing could be more fundamental.
To support workforce development in the food industry, FMI with Root, Inc. has created the Food Retail Leader Certificate program.
Learn More About the Food Retail Leader Certificate
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