Chapter 1: The State of Retail in 2024

As spring approaches, annual performance reviews are set to take place across the retail sector. Despite 2021 being a strong year for many, the outlook for employees receiving raises appears bleak.

Store managers face the daunting task of conducting numerous evaluations, often investing significant time to prepare reports for upper management. When meeting with employees, it’s crucial to have their raises finalized. Failing to do so can signal disorganization or a lack of concern, neither of which reflects well on management.

Employees are eager for clarity regarding their financial rewards. While feedback is valuable, after several years of reviews, many feel trapped in a repetitive cycle, where the focus shifts primarily to the raise discussions.

So, what can employees expect in brick-and-mortar environments? Unfortunately, not much. Companies are more focused on expanding their store count than on rewarding their current staff. In the past, a successful year meant exploring new locations, with minimal benefits trickling down to store teams.

What untapped markets could yield greater profits? Retailers often expand into areas where they assume consumers will replicate the buying habits of those in more established markets. The mantra seems to be to grow aggressively, regardless of the long-term implications.

Annual raises typically hover around a mere 3%. Only exceptionally high-performing employees might see a bump to 3.5%. Those who have received promotions within the past year often find their raises reduced or eliminated altogether, further disincentivizing loyalty.

This outdated mentality will not sustain businesses in the coming decade. The new generation of consumers seeks corporations that prioritize fair compensation for their workforce, especially those on the frontlines.

To illustrate the pay discrepancies: the median salary for a Retail Store Manager is approximately $64,599, translating to about $33.33 per hour. A 3% raise would bump this to $66,950, or $34.33 per hour—a modest increase in the retail sector. Yet, many leaders earn significantly less.

In California, for instance, the minimum wage stands at $15 per hour, with assistant managers often making just $17. A 3% raise may yield an increase of only $0.50 to $1.00 per hour, which feels insufficient, especially after navigating the challenges of a global pandemic.

Tenured employees often find themselves at a disadvantage. For example, a worker hired eight years ago earning $45,000 annually will continue to receive 3% raises indefinitely, while a newer hire may be compensated at a much higher initial rate. This disparity can create frustration among seasoned professionals.

Retail companies often justify these minimal raises by citing budget constraints. However, engaging current leaders in budgeting discussions could yield more equitable solutions.

Every option should be explored at this juncture: halt the expansion of new stores and prioritize fair compensation for existing employees. Companies must recognize the value of their tenured workforce, ensuring they have incentives to remain. Transparency in career advancement and salary ranges is crucial.

Retail is frequently perceived as a low-skill job, which is a misconception that diminishes the professionalism of those within the industry. It's frustrating to see organizations claim that their team leaders are their greatest asset while compensating them inadequately.

Retail managers juggle a myriad of responsibilities, from personnel management to policy enforcement. If established companies do not adapt swiftly, they risk losing their skilled workforce.

What’s next? The younger generation, particularly Gen Z, is unlikely to remain in a job that undervalues their skills. They understand that opportunities for higher pay exist outside traditional retail roles.

The status quo could ultimately undermine companies that cling to outdated practices. Talented store leaders may decide to explore other careers that offer better compensation for their skills.

With rising inflation and increasing costs of living, the most sensible approach for companies is to enhance employee pay. Continuing to offer minimal raises will only hinder business operations, as qualified candidates may seek employment elsewhere.

Frontline retail workers are essential to operations. It’s time for companies to acknowledge this reality and ensure fair compensation, or risk facing significant staffing challenges in the future.

Chapter 2: Insights from Retail Struggles

The first video titled "15 Retailers Struggling To Survive In 2024" provides an overview of various retailers facing challenges in today's market. It highlights the factors contributing to their struggles and what it means for the retail landscape.

The second video, "15 Retailers Collapsing In 2024," delves into the specific retailers that are on the brink of failure, shedding light on their financial troubles and the broader implications for the industry.