Forty Percent of Asda Workers Shopping at Competitors
By George Anderson
Turns out that Sears Holdings isn’t the only retailer that appears to have a problem with its employees going to competitors to buy products for their everyday needs.
According to a report on The Independent’s Web site, Asda chief Andy Bond told store managers that 50,000 of its workers (40 percent of its total) are not shopping in the chain’s stores.
Mr. Bond’s company, for the record, does not agree with his assessment of the problem. Asda puts the figure for employees who shop elsewhere at 22 percent.
Regardless of whether the actual percentage is 40, 22 or some other figure, Mr. Bond is looking to get to the bottom of the issue and has initiated an internal investigation into why so many of its employees are doing their shopping elsewhere.
The investigation begins after a recent decision by Mr. Bond to reduce the discount that workers gets on toys, DVDs and drinks from 20 percent to 10 percent. Asda employees will continue to receive their normal 10 percent discount on all other goods sold by the retailer.
The reason for rollback on the amount of the discount for toys, et al, according to The Independent’s report, was an attempt by the company to “protect profits.”
A former Asda employee who now works for the GMB general union, Giovanna Holt, said workers at the chain are going elsewhere for a number of reasons.
Number one on the list, according to Ms. Holt: “Although Asda boasts that its prices are among the lowest, the colleagues’ pay is at or near the national minimum wage and they have to buy the cheapest lines in different stores to make their money go further. A lot of them have to live hand to mouth.”
Ms. Holt also contends that Asda practice essentially freezes employees who do not follow the company line. This, she believes, comes out of the company’s open hostility for unions.
When managers visit stores, Ms. Holt alleges, they only meet with “hand-picked” workers and do not get opposing viewpoints.
The combination of low pay, a reduction in discounts and a company unwillingness to listen to employees that differ with management’s view of the world has led to poor morale and, not surprisingly, says Ms. Holt, workers shopping in competitors’ stores.
An unidentified Asda spokesperson denied there was a problem with morale saying that it was “growing steadily.” She also said Asda was considering special “discount days” where employees would save 20 percent on items purchased.
Moderator’s Comment: Are companies such as Sears Holdings and Asda making too much out of employees shopping elsewhere? What percentage of employees
should companies expect to take their business elsewhere? What do you think Asda’s investigation will turn up as the reasons its employees are shopping at other stores?
–
George Anderson – Moderator
While I agree with Mark that it isn’t unreasonable for a clothing retailer to want employees to wear their brand while at work (assuming that they are either subsidised or paid enough to afford it), I strongly believe that it’s crossing the line to dictate where they do their other shopping. If anything, a retailer like Asda which engenders mixed feelings from its employees, might find an insistence on shopping only in their stores could backfire quite badly. Not that this is what Andy Bond is currently suggesting. More sensibly, he is (at this stage, anyway) trying to figure out why his own employees don’t give more of their earnings back to the master. It will be interesting to see both what the results of his enquiries are and what action he takes to change the situation.
A person at work is under the control of the employer. When not at work, the worker isn’t. Employees, like any customers, vote at the cash register. If the goods, services and prices are right, they’ll buy. Otherwise, they go elsewhere. If the employer wants the staff to dress in the store’s fashions while at work, this has a reasonable business purpose (advertising). While not at work, what they wear is irrelevant. Smart restaurants serve the staff the same food the customers eat, so the staff can easily sell the appropriate items on the menu. If supermarkets want the staff to make food suggestions to the customers, the management can arrange staff tastings and home samplings, in many cases financed by the suppliers. Furthermore, it’s a good idea for people in any organization to learn what the competition is like. If GM executives bought Japanese cars as well as GM cars, they might’ve been more sensitive to the rise in Japanese quality. BTW, I’m generally in favor of transparency, but is it a good idea for an executive or a company to generate publicity about their failures with their staff?
Do you get the impression from this piece that the “problem” is to get Sears employees to shop at their own store more often? Nothing could be further from reality, but in typical fashion someone will rush off to ‘re-solve’ a symptom while the central issues go unidentified and untouched.
For example, we are driven to cut costs and we do so without even a glance at how that cut may also hurt customer service, revenue and ultimately profit. What Sears needs is someone to look at the ‘flow’ of the entire operation. The disablers to flow need to be identifies and eliminated while the enablers need to be elevated and strengthened. It is all one big picture.
We are in The Age of Disengagement. So many are out of the flow of things and that includes those who think they’re running things.
When it comes to one’s personal finances, loyalty goes out the window. Low wage retail employees should not be expected to purchase items at their employer at premium prices, even if they are discounted 20%. Let employees purchase items at cost or below cost. This would solve the problem. A 20% discount is an insult. That isn’t going to impress very many. Naturally, some limits might need to be imposed. When morale is bad it only encourages employees to either shop elsewhere or break the law and take things home at a 100% discount.
Reading their plaints, one wonders whether Asda or Sears has ever heard of “split” shoppers. I’m only surprised that 100% of their employees don’t shop somewhere else at least part of the time. Even factoring in employee discounts, we must expect retail staff to shop in ways that let them get the most value for their money. You can’t buy loyalty (especially counter-economic loyalty) with minimum wages.
As Ian Percy says, Is this a symptom or a problem? Several critical questions need to be answered: Are your employees part of your target market? If your employees are not within your target market and are not purchasing products at your store, is there a problem? If your employees are within your target market and are buying products elsewhere, have you done any investigation to find out why? If your employees, who depend upon you for a paycheck, are purchasing products elsewhere, why is that happening? Are your prices too high? Are your products of higher or lower quality? Are your products not as attractive? Do your products have a lower reputation? If so, on what dimensions? If your products fit the needs of your target market and if your employees are part of your target market and if your employees are purchasing products elsewhere, why automatically assume that the problem is with the employees and that forcing them to buy your products will solve the problem? You can’t force all members of your target market to purchase your products.
It could be worse. I was recently at an Albertsons where the cashier told me that “nobody” who worked in the store shopped there. Taking your dollars to another retailer (especially if they are “split” dollars as Jamie points out) is one thing. Telling your customers they shouldn’t shop in the store is quite another.
Of course, employees should shop with their employer rather than a competitor. After all, it is in their own self interest to do so because a strong company helps keep their jobs secure. But management is getting worked up about the wrong problem when they chastise employees for not doing so. Rather, they should look in the mirror.
They are employees certainly, but customers as well, and what the CEOs of these companies should be worried about is what it says about their operation when they can’t even get their own employees to shop their stores. If the company cannot even present a compelling argument for shopping their stores to employees (who arguably, have a vested interest to do so) how can they expect to convince other customers? How can management expect employees to be enthusiastic and customer oriented when they aren’t even convinced it is the best place to shop? They can’t.
Well…duh??…the “combination of low pay, a reduction in discounts and a company unwillingness to listen to employees” might have something to do with their apparent lack of loyalty and their decision to shop elsewhere.
I wonder how many fewer auto workers would buy their employer’s product without the discount. Come to think of it, perhaps ASDA, Sears and the like should develop a more generous employee discount and then extend the offer to the entire general public as well.
This is one symptom of our economy’s “race to the bottom.” When you pay your employees Wal-Mart wages (Asda, of course, is a unit of Wal-Mart), why should it come as a surprise that they find it hard to afford even Wal-Mart goods?
Over the long term, when all of us except the fortunate few are making substandard money, while costs of needed goods and services (food, energy, health care) continue to rise, who do these companies expect will be their consumers?
Maybe I missed this in another post, but a couple of quick points. Is Mr. Bond doing all of his shopping at ASDA? Until that time he needs to find something else to focus on. Company loyalty can only run so deep, especially in an era where “life-time” employment and guaranteed retirement are things of the past. I am sure that Mr. Bond worked very hard to get where he is today, but when was the last time he sat down with his rank and file employees and had a rational discussion about their shopping habits and choices? And to Ryan’s point — while they are shopping elsewhere are they badmouthing the company where they work?
Having Employees that shop elsewhere is not altogether a bad thing. That means they are engaged in the industry and have a view of their competitors. Is that good? Well, that’s based on the assumption that when they returned they were allowed to openly share and that someone or anyone would be willing to listen.
Truth or not, the impression is at best that those at the top are unwilling. Likely they probably are because, of course, they know better – right? Why bother listening to either the customer or employer, because they “have done their own research.” I have heard that line so much and too often.
Years ago, Tom Peters discussed at length the concept of being stuck in the “we’re no worse than anyone else” mentality. It was his theory at the time to then use that as your slogan and see how well it helps you stand out from the rest.
In the case of Sears and others, the symptoms that cause their employees to not shop there are likely the same as the average consumer. Yet it seems that the top executives would rather dictate a requirement to shop rather than to understand why it is the case for both in the first place. To me, its the same assumption Tom Peters made. Excellence is for someone else, in the meantime “just shop here because I said so!” As if somehow that was any more an acceptable explanation from a CEO as it was from Mom and Dad growing up. In fact, maybe the CEO’s need to grow up. (Did I say that?)
What appears to be the case is a demand that both the consumer and the employee simply accept mediocrity. The fact is, both want something better. Being “no worse than anyone else” isn’t a good enough reason. Both are likely in search of something better. Employees are consumers, they aren’t fooled easily and they want the same things that the average consumer wants. They could tell you exactly what that is – but would they listen?
I would agree with many of the comments here about the Executive Branch not listening to consumers if they are not willing to listen to their employees. To that, I would add, you get out what you put in.
If employees do not feel there is a value to shopping at their employer’s stores or that the only thing they get from their employer is a meager paycheck, loyalty is likely only one of the problems that the company will wrestle with.
On the other side of the equation, my own experience is that even the most understanding of employers likes to see at least the pretension of loyalty from their employees. I have witnessed many co-workers keep a stash of company shopping bags at home so they can make sure to take the right bag to work even if the product was purchased elsewhere. It always pays to think about the little things even if it is only self preservation.
When the Target headquarters went from casual dress to business, there was a run on Marshall Field’s to stock up. Now that Field’s is gone along with the employee discount, the buyers and executives will be shopping the competitors for their suits.
The store associates are all in khaki pants and red polo shirts
so there is no big deal.
I wonder what the labels are on Eddie Lampert’s suits. Are they bespoken from Savile Row or perhaps he is frugal and has them made in Hong Kong.
To be fair to Eddie one must remember that he is a guy the gods favor. One day in January 03, he was abducted by three men from his company’s parking lot. The kidnappers demanded a multi-million dollar ransom.
On Sunday, January 12th, 03 Lampert was released unharmed. Had his family paid the ransom? No. His kidnappers were caught when they used his credit card to order a pizza.
Thank God he hadn’t bought Domino’s! He would be out millions and the Sears crew would be rotund.
There are reasons for everything people do and don’t do. They are governed by their head and personal desires; all by itself a loyal heart is of little commercial value in retailing.
We all know loyalty must be earned in all dimensions of the relationship between employee and the company and its offerings. Employees/consumers react differently than institutionalized loyalists such as dogs. Histories are more full of examples of the fidelity of dogs than of employees.
It’s apparent Sears and ASDA have “offering” shortfalls in the heads of their employees. They need to ferret out what they are and work to remedy them for any company that doesn’t have the ability to offer what it takes to inspire employee purchase-loyalty is looking at a shortened horizon. Oscar Wilde captured the essence of the loyalty phenomenon when he said, “If you are not too long, I will wait for you all my life.”