Come every January, Monday morning meetings generally turn to the subject of executing the plans and merchandising strategy for the New Year. Occasionally, a brave produce representative will bring up a point that makes sense to him, but not to management. His appeal is to begin the year by adding more labor to the produce department to drive additional sales. Management reacts unfavorably at this type of suggestion by bringing up the age-old argument that labor is the only major cost that can be controlled by management; and to lessen this control is a guarantee of not making the year’s profit goals. Once again, management just doesn’t get it.
Virtually every retailer across the country has a formula that equates sales volume to hours of labor allocated to the produce department. The major problem with this is that it is always a week behind and does not reflect, in many situations, the momentum or seasonal surge of sales available in the department. Every retailer may have a varying aspect of this type of program to control the sales generated by the department by limiting the amount of hours allocated for tasks and merchandising activity. Over the years, this system has been defended by management because they are reluctant to give up the control they have on the amount of hours that are allocated. Additionally, management can arbitrarily reduce the amount of hours allocated to “help” other departments — mainly the front end. All in all, this type of program of how to allocate labor hours in the produce department is a negative influence to the generation of sales and profit.
“It would seem intuitive to use a proactive approach to generating sales based on the value each hour adds to the overall operation.”
What is needed is a new formula that assigns a value in terms of sales generation to each hour allocated. In this manner, actual sales goals can be planned with the proper amount of labor support to achieve the goals. This is a simple premise, and one that could catch on throughout the industry, given the importance of the department’s overall profitability. Why wouldn’t we want to utilize a positive planning tool as opposed to a reactionary and delayed one based on past department performance? It would seem intuitive to use a proactive approach to generating sales based on the value each hour adds to the overall operation. It seems logical that this type of planning would work well throughout the year and provide the needed support to maintain sales momentum and prevent any setbacks in terms of overall performance and department appearance. The challenge is to get management to change its thinking from controlling labor to a program based on utilizing the hours to generate sales. This, of course, is a radical idea and as such, will be met with resistance.
Resistance stifles growth and the opportunity to try something new to generate additional excitement and discovery within the produce department. It is certain that somewhere in the industry an enlightened retailer is using this type of formula to provide the support necessary to achieve a superior produce presentation.
We often contemplate the state of retail produce operations across the country — trying to discern what needs to be done to improve the presentation, and ultimately produce consumption. We all fret about how to compete against the grocery delivery services and online companies that are a constant threat to our business. These innovative companies utilize new strategies to challenge the establishment. Not every strategy is successful. However, these companies continue to experiment and innovate. Why shouldn’t we do the same? It seems like we’re caught in a downward spiral generated by extreme control of labor that has robbed the produce department of its appeal to customers. It has resulted in too many “sterile” presentations across the country that ultimately disappoints customers.
With the start of a new year, it seems to be the right time for the produce industry to take a fresh look at how it operates in every aspect of the “go-to market” strategy. To stand idle with what has always been ensures the continuing downward spiral. It is our responsibility to explore new strategies to determine if they have merit and if they can help us regain the confidence and preference of the consumer shopping in the fresh produce department.
Don Harris is a 41-year veteran of the produce industry, with most of that time spent in retail. He worked in every aspect of the industry, from “field-to-fork” in both the conventional and organic arenas. Harris is presently consulting and is director of produce for the Chicago-based food charity organization, Feeding America. Comments can be directed to [email protected]