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Corporate-level salaries in the retail grocery arena saw few changes in 2020 as companies scrambled to meet soaring consumer demand and adapt to new workplace and shopping conditions amid the COVID-19 crisis.

Grocery retail salaries poised to grow after pandemic ‘stress test’

Levels held firm in 2020, but turnover and new talent portend changes

Corporate-level salaries in the retail grocery arena held steady in 2020 as companies scrambled to meet soaring consumer demand and adapt to new workplace and shopping conditions arising from the coronavirus pandemic.

At the same time, employees across the leadership and management ranks stand to be rewarded with sizable bonuses for their extra efforts since the COVID-19 outbreak, according to Jose Tamez, managing general partner at Austin-Michael, a Golden, Colo.-based executive search firm specializing in grocery retail.

To address changing needs accentuated by the pandemic, grocery retailers also will fine-tune their organizations, and the bigger spotlight that the crisis put on the food industry — where sales have boomed — could attract new retail talent from outside the sector, he said.

Data from Austin-Michael show that 2020 salaries were largely unchanged across the C-suite and senior and mid-level management versus a year ago. The research listed annual salary levels at grocery retailers in three categories: large ($10 billion or more in sales), medium ($2 billion to $10 billion in sales) and small ($500 million to $2 billion in sales). Bonuses, special incentives and other compensation were excluded. (Click the Full List link at the bottom to see 2020 and 2019 salary data.)

Status quo at the top

The top salaries held firm from 2019 to 2020, with CEOs at $1.9 million annually for large grocers, $900,000 for midsize companies and and $635,000 for small players. Pay also stayed the same for the chief operating officer, chief financial officer and chief marketing officer across all companies. In the C-suite, the only change came in the chief information officer post, where the CIO salary at small grocers rose to $310,000 from $300,000.

“The numbers typically move up when people leave companies to go to another job. One of the reasons they leave a job is to get more pay, which affects the [salary] numbers. But there just has not been as much movement. That’s why you see the numbers flatter. COVID has affected that for a lot of reasons, but one of them is travel. For most of the year, since COVID came to bear, people don’t want to travel. They are still scared,” Tamez explained.

“Another reason is that companies are hanging onto people because they need them, even if they were unhappy with some performance measures of certain personnel,” he said. “They had to have those people and needed all hands on deck. So their turnover wasn’t as much, and that created a flatter market overall. The good side of that is, everyone is going to max out on their bonuses this year, by and large. People are going to receive some pretty hefty bonuses in the first quarter. They are going to be compensated for a pretty tough year.”

More activity in the middle

According to Austin-Michael’s data, salary changes in 2020 came primarily at the midlevel positions and at small and midsize grocers. They include vice president of marketing (+$5,000 to $245,000 at small retailers), VP of grocery (+$5,000 to $235,000 at small retailers), VP of perishables (+$5,000 to $230,000 at small retailers), VP of general merchandise (+$5,000 to $250,000 at midsize retailers), VP of meat and seafood (+$5,000 to $210,000 at small retailers), and VP of produce and floral (+$5,000 to $195,000 at small retailers).

“The regional chains seem to have shown more of a need for impact players as opposed to previously,” according to Tamez. “They recognize that impact players are at a premium, and I’ve seen some of those smaller chains actively going out to capture some of that talent.”

With retailers going the extra mile to keep products in stock, supply chain and logistics have been critical for grocery stores during the pandemic, and some of Austin-Michael’s 2020 salary figures reflect that. The VP of distribution position saw higher salaries across companies this year, at $260,000 for large grocers (+$10,000), $225,000 for midsize grocers (+$10,000) and $195,000 for small grocers (+$5,000). And at large companies, the transportation director salary rose $5,000 to $170,000.

“The focus this year has been on getting the product, getting it out and moving it,” Tamez said.

Changing organization

With COVID-19 putting companies to the test, supermarkets and other operators have seen where they’re strong — and where they’re lacking. That’s likely to lead to organizational adjustments in the first half of next year, Tamez pointed out.

“Org[anizational] charts have gotten flatter in terms of how they’re operating, meaning they now move at rates indicative of a flat chart. They’ve been in motion through COVID because they’ve had to be. As a result of that, plus the stress test that the industry has gone through on all fronts, what that has done is revealed where companies are weak, where they need to strengthen themselves, both in personnel and how their organization is set up,” he explained. “So what’s forthcoming is an adjustment in a lot of those personnel and org charts. You’re going to see a lot more movement in the first quarter and the beginning of the second quarter. That stress test reveals people who were not up to par with the new age of food retail.

“So that has to be addressed. I’ve seen it start to happen already firsthand,” he added. “That will be coming. But the grocery industry, as a whole, will be stronger for sure.”

Skillsets in highest demand will be in supply chain and technology, led by e-commerce but also including IT infrastructure, front-end systems and applications.

“The two disciplines that were affected the most [during the pandemic] were IT and supply chain, without question,” Tamez said.

Grocery stores: The new place to be in retail?

Supermarkets and other grocery retailers showed their mettle amid the double whammy of the COVID-19 crisis and the ensuing acceleration in e-commerce. Tamez sees this as significantly raising the industry’s profile as an employment destination, especially the potential of luring retail talent who might never had considered joining the grocery sector.

“The industry has probably gotten more use of its talents this year than they ever had before. The productivity levels have been tremendously high this year, because of the pandemic,” he said. “But one thing that’s interesting is the way the industry evolved in a very short period of time and how well they’ve done. It’s really been nothing short of spectacular. They moved at speeds they’ve never known before, speeds at which people who follow the industry would never think that they were capable of. They’ve adopted e-commerce, curbside pickup, at rates that were even faster than they thought they could. They have done a tremendous job.”

Meanwhile, other retail segments — such as department and specialty stores, apparel, restaurants, etc. — have struggled amid the pandemic, with many experiencing massive downsizing or going into bankruptcy or out of business.

“The supermarket industry has never really been considered a dynamic segment of retail. But this year, it has been and will continue to be,” said Tamez. “Other segments in retail are struggling — furloughing, Chapter 11s and so forth. Where the supermarket industry has made inroads in recruiting talent, and will continue to do so in 2021, is in retail segments where, in the past, they’ve never been able to touch. And the main reasons are because people in other segments of retail have seen how volatile theirs is and the fact that a) it’s not coming back, and b) here is a very sustainable segment in retail that has longevity.”

An influx of talent from different retail arenas, such as fashion, could help grocery stores think more outside the box in such areas as shopper engagement and the customer experience, he noted.

“I’ve gotten people call me back from segments of retail that a year or two ago would never have called me back. But they’re interested now,” Tamez said. “Now the supermarket industry can sell itself as being a dynamic space in retail.”

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