Could proposed job cuts at Asda, Tesco and Wilkinsons spell the end for supermarkets?
Supermarkets and major retailers such as Asda, Tesco and Wilkinson’s have announced redundancies and reduced working hours. Last year, the major retailers British Home Stores (BHS) also closed their doors. There are several reasons for these proposed changes.
At present parents are doing back to school shopping, however high street retailers and supermarkets are no longer their first choice. Many schools have outsourced this work to online retailers. There are many parents who also go for second-hand, as old uniforms are sold at school fairs. There are also sites that allow uniform swapping, where parents can get rid of old uniforms and also buy second hand replacements. This means a large number of business is taken away from supermarkets who also sell uniforms.
Due to convenience, online shopping is also getting more popular, especially as people are leading busier lives and do not always have the time and energy to spend in a supermarket. This again means less work to do in the physical store, which could be the rationale for cutting down on the hours of the staff who work there. Online retail is taking over more. The Office of National Statistics figures from January 2017 show that online sales figures are increasing by 10.1% year by year. However Companies House figures also from January 2017 show that sales in shops fell from £21.6bn to £22.3bn. Looking at these figures, we spot the various reasons why these potential job cuts and reduced hours are being proposed.
Self checkouts are also being utilised more in supermarkets resulting in lesser need for a staff to work full time. Employers can find it difficult to justify paying salaries when there is not enough work to go round.
Society is also becoming more health conscious going for organic produce and even growing their own fruit and vegetables. This again means less need for the supermarket. The Soil Association reports from 2016 showed that since the financial crisis in 2008, sales of organic food have rocketed, as much as £2bn in 2016.
When it comes to clothing people are up cycling and buying second hand. Crafting such as knitting and sewing has been made popular by celebrities, inspiring other people to make their own clothes. This again takes business away from the supermarket. Ebay is growing in popularity for getting rid of unwanted clothing to make more money and finding more reasonably priced alternatives to Georges, Asda for example. Figures released in 2016 showed that 7.2bn of the consumers on Ebay were from United Kingdom.
As online retailers and consumer spending is changing what does this mean for the future of the supermarket and other retailers? Reducing hours is just the start. Will the whole concept of the supermarket eventually become obsolete? Many supermarkets make these decisions based on consumer habits. However does this also mean there is less of a need for the personal customer service touch and consumers prefer the convenience of the push of a button. This also shows how fast paced society is becoming. Life is getting more expensive, however salaries are not getting any higher which means people have to work more. With the convenience of iPhones, tablets and various gadgets, consumers just want to click a few buttons to get their shopping, rather than spend hours in a supermarket. UK retail reports showed that in 2016 57% of online purchases were made using a mobile device.
As well as uncertainty for people who work in these jobs what will happen to the customer service aspect if for example anything goes wrong with online shopping. Online retailers nowadays can have a chat facility to resolve customer issues. Could this mean face to face customer could also become obsolete? As well as uncertainty these proposed job cuts have a bigger impact for both consumers and employees.