Retail Week Prospect ranks the top 30 most productive retailers in the UK, measured by sales per employee.
|Rank||Retailer||Sales per employee|
|17||The Hut Group||£270,955|
|18||Chain Reaction Cycles||£263,830|
|22||Oak Furniture Land||£240,229|
Asos has maintained double-digit sales growth for well over five years. While a hike in its headcount in recent years has resulted in a declining sales per employee, at approaching £550,000 the etailer still takes top position by a significant margin.
Asos is followed by Farfetch and Missguided, meaning the top three all operate in the fashion sector.
Online retailers also have a strong showing in the ranking, with four retailers in the top ten being pureplays.
Given its ruthless focus on efficiency, it is perhaps unsurprising that Aldi takes sixteenth place. It is in fact the only grocer within the top 30, underlining its tight control of all aspects of its operations. Fellow German rival Lidl did not make into this table as it does not release accounts for its UK business.
Just ahead of Aldi is Majestic in fifteenth place. Its sales per employee of just over £275,000 has mostly been driven by the relatively high order values it achieves, as well as the acquisitions of Naked Wines in 2015 and Lay & Wheeler in 2009/10. Being online operations, these businesses achieve much higher sales per employee than the bricks-and-mortar-based Majestic operation.
Analysing the data by sector, electricals tops the rank with an average sales per employee of just under £230,000.
|Rank||Sector||Sales per employee|
|3||Home & DIY||£168,293|
|4||Leisure, outdoors & sports||£155,367|
|5||Health & beauty||£154,936|
|7||Fashion & footwear||£143,211|
|9||Entertainment & general merchandise||£121,481|
The furniture sector follows closely behind, averaging at some £215,000. This sector ranks well overall because of the typically high average transaction values.
The range in the furniture sector is broad however, with etailers Made.com and Loaf having a sales per employee of more than £340,000, and Dunelm at the other end of the scale coming in at less than £100,000.
But in terms of range, the fashion and footwear sector has the largest spread of sales per employee. The sector covers a broad spectrum of retailers, from luxury to value, as well as online. Asos bolsters the fashion category at the top end, while retailers such as Claires, Blue Inc and Shoe Zone are at the other end of the spectrum with a figure of less than £50,000.
Unsurprising is the number of online retailers in the top 30 ranking, such as Moonpig, Loaf and SecretSales. These are lean online operations, which do not require store staff, allowing them to benefit from strong sales per employee.
Productivity – which is notoriously hard to measure – is a key performance indicator that retailers are focusing on in 2017. This comes against a backdrop of squeezed profit margins.
Cost pressures post-Brexit
Cost pressures are coming from the recent devaluation of sterling following the EU referendum, which is causing headaches for retailers that source in dollars and euros.
Meanwhile, in the grocery sector intense competition has eaten away at margins. Certainly, Aldi being the only grocer in the top 30 ranking won’t come as light reading for the big four grocers.
In the longer term, efforts by retailers to improve productivity will be influenced by government policy.
BRC chief executive Helen Dickinson said last month: “At a time when UK retail is having to find 20% of its current profitability to mitigate the impact of uncontrollable increases in its cost base and against a backdrop of inflation and slow growth, the industry’s commitment to improving productivity will require the support of government policies that allow room to invest in skills and technology for the digital age.”
Indeed, national minimum and living wage factors are likely to take their toll on low skilled employment. Retailers may look to boost margins and productivity in the medium term through investment in technology to replace lower skilled roles.
This data has been compiled by using the latest available financial year for which retailers have filed their annual reports or accounts at Companies House.
The ranking excludes retailers that calculate staff costs based on FTE employment.
It also excludes buying groups, franchised formats and opticians.
The ranking was compiled by Retail Week Prospect, an intelligence service offering insight and analysis on the UK’s retailers.
- Alliance Boots
- AO.com (Appliances Online)
- Chain Reaction Cycles
- Dixons Carphone
- Furniture Village
- General Merchandise
- Home & DIY
- Majestic Wine
- N Brown
- Oak Furniture Land
- Online retail & ecommerce
- Sports, Leisure & Outdoors
- The Hut
- Yoox Net-a-Porter