For far too long, the big four were unwieldy and top-heavy bureaucratic machines, but the grocery world is changing.  

Convinced of their invincibility – some more than others – they hired heavily within management to symbolise their retail hegemony. Hell, in the nineties and early noughties these giants of the grocery world created centralised command structures that would make Stalin turn his head in awe.

But the grocery world is changing — and the announcements by Sainsbury’s that it is restructuring its in-store management teams and Morrisons that it is cutting 720 head office roles and brining in 5,000 store staff, are the latest examples of this fundamental and structural change.

With shopping habits transformed by the internet, and market share dissolving as a result of sharp new competitors, the Big Four have been woken from their slumber.

They have to act, and they have to cut costs — and the biggest cost of all is the labour one.

The job cuts announced by Morrisons were, in truth, always on the cards. And while nobody likes to see people lose their jobs, restructuring its top-heavy management and support function is something the grocer should have done many moons ago.

What we’re witnessing is a return to Morrisons’ heritage and core values. Ken Morrison was a notoriously no-nonsense retailer and within this announcement rings his mantra of old: “We are shopkeepers, so let’s keep shop”.

Efficient discounters

So why are today’s supermarkets restructuring their management operations — and at such scale? For starters, new technology, supply base efficiency and standardised store operations mean that the managerial skills of old are required less and less.

Walmart Canada, for example, has operated their behemoth stores with only four senior managers for years. Management are going because management, in many areas, are no longer important.

Cutting managerial positions isn’t just about driving efficiencies, though. It’s also about being agile as a retailer. Today’s supermarkets now understand that the heavier you are up the hierarchy, the longer it takes to get anything done — and this can really hurt you.

After all, the super-efficient discounters have stolen a march on the Big Four with their ultra-lean and nimble customer-facing retail philosophies.

This trend — of streamlined, agile and customer-focused head offices — is something we’re set to see more and more of within the UK — and not only in relation to food, either.

Customer service

But what will all this mean for the customer? In truth, if retailers, such as Morrisons, manage their change correctly then customers really won’t notice a massive difference; this is more about removing wasted hours that never impact the customer. It’s back-office stuff, not front.

Nevertheless, while we believe Dave Potts and Morrisons are doing the right thing — and would like to see more of this type of restructuring for the longer-term health of the sector — there can still be issues.

The change to a leaner, more customer-facing approach has to be managed well. Asda, for example, went through significant pain recently during its own management restructure.

Today, at Asda, stores that previously might have had 20 managers could have just 4. Instead, there are more people on the shop floor, who are there for one simple purpose: to deliver better customer service.

It’s certainly better customer service, and leaner retail, where Morrisons is headed — and with a back-to-basics retailer at the helm, they will hopefully achieve this. The only question now is how long will it take, and how will the other supermarkets respond?

  • James McGregor is a director at Retail Remedy