Starbucks says there are more than 170,000 possible drink combinations available, but outside estimates have put the number at more than 300 billion. And the person in front of you always seems to be ordering 100 million of them.And, of course, the company ethos (like Friendly's in my hometown, and elsewhere since) decrees that staffing always be less than sufficient. The Large Minds that run such retails remain convinced that keeping labour cost under some Magic Number is the key to profit.
Pity that there's no accounting entry for lost revenues from customers who walked away.And, of course, for those who surmise that "the easy 80%" is a figment of my warped mind
In many businesses, including food and grocery, the 80/20 rule applied. You'd get 80 percent of your business from 20 percent of the product line.That's not exactly the easy 80%, but in the same family.
So, is there any data which proves that the BoM of retail is dominated by labour? Let's see what our fingers walking through the Yellow Googles can find. Boy Howdy! there is some data.
For fashion retailers, labor costs typically ranged from 10% to 20% of salesI'll guess that Starbucks falls toward the grocery store end of things: customers know what they want (the more convoluted the better), the baristas aren't helping them get the right look, and so forth.
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Grocery stores, on the other hand, had lower labor costs, as many positions require less specialized skills.
So, what's the deal? At the store level, managers have no other say in cost control and little to no say in stimulating demand. Knowing a few managers in such retail, about all they do is fill out paperwork, and try to keep a handle on "shrinkage". And, increasingly, as the report shows, Corporate controls staffing pretty tightly. The C-suite denizens feel powerless (and may be right) to control any other costs or increase demand. As a result, profit, such as it is, has to come out of the hides of the worker bees. Ain't capitalism grand?
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