HR implications of business expansion: the UK supermarket sector

The UK grocery giants have weathered the recession – and the weather – in reasonably good shape and are set to create at least 32,000 jobs this year amid one of the biggest store-opening sprees in the history of UK grocery retailing, according to The Guardian.

There are lots of potential constraints to business expansion, and the recruitment, induction, and training implications alone seem daunting.

Sainsbury’s plans to create 20,000 jobs over the next three years as the UK’s third-largest supermarket tries to catch up with its larger rivals Tesco and Asda by targeting growth in the north, Scotland and Wales. Morrisons are planning to recruit 6,000 staff (you can see their boss in a video clip here). There’s a video clip of Sainsbury’s CEO too here.

A recent study of UK supermarket expansion found one of the Big Four gets planning permission for a new store every working day of the year, with Official figures from the Department for Environment, Food and Rural Affairs put the number of workers in food and drink retailing at 1.1 million. Analysts say the Big Four UK grocers are growing by 450,000 sq metres of new space a year, which would see total industry floorspace rise by more than a fifth by 2014.

Tesco will add 292 stores this year, taking its total to 3,022, according to forecasts, while Sainsbury’s will add 130 to give it 1,123. Asda will see a big step up from 387 to 571, thanks in part to the acquisition of Netto, and Morrisons will add 19, taking it to 477. Waitrose announced plans for 39 more stores last week. Tesco is already the UK’s biggest private-sector employer with 287,669 staff and a spokesman said its expansion would mean 9,000 vacancies this year and next.

Where will all the new workers be recruited from? Are the supermarkets the lucky beneficiaries of rising unemployment and cut backs to the public sector of the economy? Some observers are questioning the ‘quality’ of the new jobs. Tesco has responded by highlighting that a number of its top executives, including new chief executive Phil Clarke, had started their careers on the shop floor, while its outgoing boss, Sir Terry Leahy, was a graduate trainee. Sainsbury’s chief executive, Justin King, said it recognised the importance of “doing more than simply creating jobs” and, along with Morrisons, stressed that the positions offered vocational training.

You might like to think through some of the other significant HR issues associated with plans for such a significant increase in employment.