Labor Cost Increases Compound Operational Inefficiencies in Peak Times

Key Quotes

"The government announced in the national minimum wage increase from the 1st of April 2026 so for those and I'm sure everybody does know but as a reminder for over 21s they'll get a 4.1 increase to £12.71 an hour anybody between 18 and 20 will get an 8.5 increase to £10.85 an hour and 16 to 17 year olds and those who are on apprenticeships get a 6% increase which will work out at £8.60 an hour."

Sue notes that this wage increase layers on top of other rising costs for businesses, such as national insurance contributions on higher wages. She explains that while individual increases may seem small, the cumulative effect of multiple cost pressures can be significant for businesses.

"The one thing that always amazes me that's never in the press is the kind of the upward pressure on salary then so that's great those people are getting 4.1, 8.5, 6% pay rises but I know we talk about it a lot we talked about it a lot at the forum this year and I'm sure it will be on the agenda next year that differential then between supervisory roles, team leaders, deputies, assistant store managers, closes."

Sue highlights that the headline wage increases for entry-level roles can create a squeeze on the salary differential for supervisory and management positions. She argues that businesses must consider how to maintain these differentials to incentivize advancement and retain experienced staff.

"I'd argue are the people that are getting these pay rises doing more for it or actually since the national living wage kind of 10 years ago were the people actually doing the same job and we're paying them more which probably is the case but again it's about back to James's point getting the most out of the process and therefore the people."

Sue questions whether the pay rises reflect increased responsibility or simply an adjustment to the rising cost of living for the same roles. She connects this back to James's point about understanding where people are spending their time to ensure maximum productivity from the workforce.

"We've seen increasing trends that has sorry the data has tightened versus the workload so there is a risk that the workload the resource isn't there for the peak times there's just isn't that same flexibility in the team's schedules and we've seen a couple more studies over the last month where at busy the busiest times so Saturday afternoons that sort of thing we're actually seeing quite big queues and interestingly it is in places where the or from the go self checkout tills available."

Sue observes that data indicates a tightening of resources against workload, posing a risk for peak times due to a lack of flexibility in team schedules. She notes that even with self-checkout options available, busy periods are still experiencing significant queues, suggesting a potential issue with how resources are managed.

"I've seen on a couple of recent projects when there have been the most customers in the store there's also been the most break time and I know it's difficult in in stores when you have people on certain shifts they need to have breaks at certain times but in one one client in particular it almost looked like the the team were thinking great we've got all the stock on the on the shelves everything's looking good now we can take a break and then they let the queue build up while they're having their break and then come back and and serve customers when they've when they've finished."

James points out a counterintuitive finding from recent projects: increased customer presence in stores coincided with increased break times. He suggests that in some cases, teams may be prioritizing restocking and store appearance over immediate customer service during peak hours, leading to queue build-up.

"It sounds something really simple but it just adds so much time into the process and from an engagement point of view where you've seen new touchpoint layout how do you how does that typically work when process change or layout change I think people are very good at probably the plan the fit out the physical aspect of it but does that always flow through in terms of how the team then engage with it and and see the benefits or don't see the benefits."

Sue discusses how seemingly minor changes in layout or process, like the example of a lidded box for utensils, can significantly add to task time. She questions whether the physical implementation of new layouts or equipment always translates into team engagement and perceived benefits.

"I can't think of a single time where it's actually worked as people expected it to usually because colleagues aren't working with the kit the way they were expected to or and sometimes we've had people that don't know how to use it and we've actually been saying look did you know it's got this function it was supposed to be one of the things we're there to measure but the team don't even know it happens so actually what is human nature that people default back to the way they used to work unless you really help them get to that new way of doing it."

Sue observes that new equipment or layouts rarely perform as expected because staff often do not use them as intended, or are unaware of their full functionality. She posits that human nature leads people to revert to familiar methods unless actively guided towards new ways of working.