The More the Merrier

By artappraiser on Tue, 03/20/2012 - 8:39pm |

By James Surowiecki, The New Yorker, March 26, 2012

Over the past decade, the Japanese fashion chain Uniqlo has become among the most successful retailers in the world. Its success is due in large part to the fact that it has found a way to sell basic stuff that is not only affordable but also stylish and durable. And there’s something else that makes Uniqlo distinctive: it hires a lot of people, and spends a lot of time training them.[....]

A recent Harvard Business Review study by Zeynep Ton, an M.I.T. professor, looked at four low-price retailers: Costco, Trader Joe’s, the convenience-store chain QuikTrip, and a Spanish supermarket chain called Mercadona. These companies have much higher labor costs than their competitors. They pay their employees more; they have more full-time workers and more salespeople on the floor; and they invest more in training them. .[....] Not surprisingly, these stores are better places to work. What’s more surprising is that they are more profitable than most of their competitors and have more sales per employee and per square foot [....]

If investing in employees yields such big dividends, why don’t more retailers do it? Partly, it’s a matter of [....]

URL:

http://www.newyorker.com/talk/financial/2012/03/26/120326ta_talk_surowiecki#ixzz1phtJacep

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The More the Merrier

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