Waitrose is bidding to create a more “flexible working model” in its shops by stripping out 180 store management level roles across the business.
The move is designed to drive efficiencies in stores and improve customer service levels by creating what the upmarket grocer calls a “whole shop” culture, rather than dividing teams into segregated departments like fresh, frozen and beers, wines and spirits.
It’s a strategy that shouldn’t come as a surprise. Waitrose is in fact one of the last supermarket chains to restructure in such a manner as it faces into cost pressures, adapts to rapidly changing consumer habits and evolves the role of its shops and staff.
Back in May 2014, Asda axed thousands of middle managers, with its then-chief operating officer Mark Ibbotson declaring at the time that the retailer was “about 18 months ahead of competitors.”
“The upmarket grocer is banking on the strategy creating a flexibility and agility among store teams, giving shop floor staff more decision making capability and freedom to help customers across different parts of the store”
“They’re all going to have to do this,” Ibbotson warned. And so it proved.
Months later, Yorkshire neighbour Morrisons said it would make 2,600 redundancies as it kickstarted its own store simplification strategy.
In February the following year, Tesco’s new boss Dave Lewis set out plans to strip out the layer of management that sat between store managers and shop assistants, including deputy store manager positions from its supermarket teams.
So is Waitrose behind the curve?
“Definitely,” says Retail Remedy senior consultant Paul Thomas. “It’s been overdue for a while.
“But if they were performing well, they probably haven’t needed to do it. It’s when they feel the pinch that companies tend to look at it.”
While saving on overheads will undoubtedly be one of the factors at play in Waitrose boss Rob Collins’ thinking, Thomas believes the grocer’s decision is primarily a customer service play.
“It should result in faster decision-making in store, while still having the right amount of people facing the customer, so there will be no impact on customer service,” Thomas suggests.
“There will undoubtedly be a cost play, but I do think it’s mainly about efficiencies.
“Waitrose wants teams to work together and maximise the use of resource within the store, moving away from that silo mentality.”
Last mover advantage
The upmarket grocer is banking on the strategy creating a flexibility and agility among store teams, giving shop floor staff more decision making capability and freedom to help customers across different parts of the store.
Although Waitrose has moved last in its drive to achieve that culture in stores, Thomas thinks that delay could ultimately work in its favour.
“The benefit for Waitrose is they have waited and are one of the last to make these changes. They will have seen what other companies have done, how it’s worked and they are now making a well-informed decision,” Thomas explains.
He suggests the upmarket grocer will aim to emulate Morrisons and Tesco – which have reported improving customer service metrics since their respective reshuffles – rather than Asda, which Thomas believes made “too many cuts.”
“It’s definitely worked in Tesco and Morrisons – it’s created clear ownership and clear direction,” Thomas adds.
“But I think the Walmart machine lost its focus and concentrated too much on profit, so started reducing costs each year.
“Asda has probably gone a step too far and needs to come back the other way a little bit.”
Head office changes next?
While the staff rejigs carried out by the big four may have had differing levels of success, there is one thing they all have in common – they have been launched at a similar time to head office restructures.
Thomas speculates that Waitrose’s move could be a precursor to similar changes at its Bracknell headquarters.
“It will be interesting to see if they do something in [its] head office, which is renowned for working in silos within different departments and functional areas,” Thomas says.
“That could potentially be their next ploy – sort out the shops first, then move into head office.”
Whether or not such a move is on the horizon, Waitrose will be counting on the store restructure paying dividends as it bids to continue growing in a fiercely competitive grocery market.