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11/29/2021

X/SPECS: How retailers are dealing with the labor, materials shortage

Deena Amato-McCoy
SPECS Program Director
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Mike Guinan, VP operations and services, White Castle; Aaron Harris, VP real estate and construction, Dutch Bros.; Danielle Mosley, facilities manager, Aarons’s

Labor and materials shortages are giving the retail industry a run for its money. But companies are finding ways to persevere and work through it.

This was the message conveyed by a retail panel session at Chain Store Age’s 19th annual X/SPECS, the exclusive event for executives involved in the planning/design, construction and facilities management of retail stores and restaurants.

“Companies that downsized during the pandemic are hiring – and paying a premium to get employees,” said Craig Rowley, senior client partner, Korn Ferry, who moderated “The Labor Crisis: Solving the Workforce Shortage,” session at X/SPECS. “In fact, 20%-to-30% salary increases are common.”

The retailers on the panel said they are circumventing the labor shortage by focusing on a few key priorities.

Flexibility
“We are learning to be more accommodating with vendors and associates. While we wait for materials to arrive, we have to make allowances and buffers for deadlines. Since our associates are also now working longer shifts, we are more flexible with time off. For example, if they work through the night, we will give them the next morning or day off.”
​​​​​–Aaron Harris, VP real estate and construction, Dutch Bros.

“We have a number of remodels planned for 2022. We have been ordering materials on a three-to-six-month lead time so we have it ready. This keeps our project downtime to a minimum.”
​​​​​–Mike Guinan, VP operations and services, White Castle

Materials Alternatives
“As construction and materials costs continue to rise, modular and prefabricated materials have helped us. The materials are constructed in a factory, which enables us to save internal resources needed to construct the buildings. Specifically, these materials are saving us $100,000 and up to 24 days when completing new locations.”​​​​​​​
Aaron Harris, VP real estate and construction, Dutch Bros.

“Our LED bulbs are stuck on ships and in shipyards due to supply chain delays. To circumvent delays, we count on local contractors that are able to swap out LED lights with new bulbs until our service providers can get us the materials we need.”
​​​​​​​​–
Danielle Mosley, facilities manager, Aarons’s

Training
“We are educating and training our general managers on all equipment as well as maintenance strategies. If a repair is needed, our technicians are able to start troubleshooting with store managers on a phone call and find a workaround until a technician can arrive onsite.”
​​​​​​​–Mike Guinan, VP operations and services, White Castle

“The most challenging turnover is among professionals who are two-to-eight years out of school and have been working remotely for 18 months. This group is not getting the attention and coaching they need, and — like most of us — are tired of constant Zoom meetings and heavy workload.”
​​​​​​​–Craig Rowley, senior client partner, Korn Ferry

Automation
“To proactively manage our facilities maintenance, managers access a mobile dashboard to assess services. This eliminates [excessive] emails and requests go directly to our technicians. Managers are also able to monitor when updates are due and when maintenance is complete.”
Mike Guinan, VP operations and services, White Castle