Saturday, January 23, 2016

Restaurants Train and Develop Employees C-stores Reap the Rewards

The restaurant sector talks a lot about ‘attracting, retaining and developing the best people’ and they try seemingly half-hearted.  Half-hearted, yes because simultaneously we read that the restaurant industry has been lobbying hard in state Capitol’s and in Washington DC to convince lawmakers that proposals to raise the minimum wage should not move forward and that restaurant workers should be exempt  including waiters, bartenders, valet parking attendants and other tipped employees who generally supplement their base pay with gratuities.  

We are talking companies the ilk of YUM! Brands, (YUM) which owns Taco Bell, KFC, Pizza Hut; Darden Restaurants (DRI), which owns Olive Garden, and Cracker Barrel Old Country Store (CBRL) each has  directly lobbied against a bill to raise the minimum wage.  

Foodservice Solutions® Grocerant Guru® believes that the undercurrents of change maybe evolving the thinking by branded chain restaurants on employee pay.  The National Restaurant Association reports that “The overall turnover rate in the restaurants-and-accommodations* sector was 66.3 percent in 2014, up 10 percentage points from the recent low of 56.6 percent in 2010.”  The 2015 number will not be any better.

So, what’s going to drive the change?  Convenience stores and Grocery store delis are proactively recruiting trained restaurant employees as they expand into Ready-2-Eat and Heat-N-Eat fresh food according to our own Grocerant Guru®.  They are offering trained restaurant workers better pay and incremental benefits. 

Over the past several weeks what looks as if it were a strategic competitive industry position shift as four key convenience stores announced that they were increasing employee compensation.  That is a huge shift in mind-set even for an industry that pays more on average than the restaurant already.  Most important the companies raising pay are leaders in the ‘battle for share of stomach’ with the restaurant sector. 

Sheetz said it will invest more than $15 million to raise the wages of store employees across the company without cutting back on hours for full-time employees. The starting hourly wage for sales associates will rise to $10 this month, with shift supervisors making $13 and assistant managers $16. The minimum wage in Pennsylvania is $7.25.

Another major Wawa convenience-store operator based in Pennsylvania is also raising its wages.  They “are moving to $10 as our minimum rate for our customer-service associates along with increasing their pay band overall,”  “All of our associates will be receiving a 5% increase, in addition to the annual merit increase provided this year. Wawa’s shift supervisors start at $13 an hour”

Rutter’s Farm Stores join the ranks as well.  All new employees at Rutter’s start at $10 an hour, plus an additional $1.50 an hour for working third shift. Store managers earn between $54,972 and $74,060 annually, and restaurant managers earn between $36,254 and $58,435. Ricker’s Convenience Stores Ind.-based company raised its entry wage to $9 an hour—$1.75 more.

Employees are more than another commodity. They are your brand ambassadors. The restaurant sector might want to rethink quickly rethink the half-hearted efforts put forth of late and become more proactive in attracting, retaining, and developing the best people.  

The grocery deli sector is an $11 Billion dollar sector growing at 10% a year according to FMI and they too are looking for trained, quality, restaurant workers. Since restaurants train, develop employees they should not let their hard costly efforts go to waste letting grocery stores and C-stores reap what should be your rewards. 

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