CHECKING OUT SUPERMARKET LABOUR USAGE:
THE NATURE OF LABOUR USAGE AND EMPLOYMENT
RELATIONS CONSEQUENCES IN A FOOD RETAIL FIRM IN
AUSTRALIA
Robin Anne Price
Bachelor of Arts (University of Queensland),
Graduate Diploma Adult & Vocational Education (Griffith),
Graduate Certificate in Management (Queensland University of Technology),
Bachelor of Commerce (Hons) (Griffith)
Department of Industrial Relations, The Griffith Business School,
Griffith University
Submitted in fulfilment of the requirements of the degree of
Doctor of Philosophy
27 April 2004
ABSTRACT
This thesis examines the nature of labour usage within a market-leading Australian food
retail firm and the employment relations consequences of the labour usage strategies
employed by the firm. Retail employment is well established as a research subject in the
UK, but has received comparatively little research attention in Australia. Given that
retail industry employment accounts for 15 per cent of the Australian workforce, this
represents a significant oversight.
Within the retail industry, the supermarket and grocery sector employs 6 per cent of the
Australian workforce. The sector is dominated by two major chains and is highly
competitive, with a reputation for low profit margins, mundane jobs and low pay. The
sector is recognised for an employment structure that is segmented with one segment
holding full-time jobs with core employment conditions and the other segment, part-
time jobs with poor working conditions.
The dominant theory used by scholars to explain this employment structure is the dual
labour market model and later iterations such as Atkinson’s flexible firm model. This
research assesses the value of these models, in particular Atkinson’s flexible firm
model, as a representation of the labour usage strategies of a market-leading Australian
food retail firm.
This analysis demonstrates that, in a general sense, Atkinson’s model has applicability
to the labour usage strategies exhibited in food retailing. The research found that,
contrary to the theories of dual labour markets, a strong internal labour market operated
within the firm with short hours casual employment as the port of entry. The benefits of
this practice for the organisation were flexibility in labour usage and substantial wage
savings, while the negative consequences were recruitment difficulties, exacerbated by
high levels of staff turnover. For the employees, the consequences depended on their
position in the organisational hierarchy and their individual circumstances, but involved
initially accepting limited working hours and low pay in order to gain entry into the
organisation. The research undertaken for this thesis leads to the development of a
revised model, the casual internal labour market model, which more accurately depicts
the labour usage strategies within the case study organisation.
Retail researchers argue that it is necessary to understand the dynamics of the industry
in order to understand the structure of labour usage. Additionally, employment relations
and retail researchers both stress the need to contextualise labour usage patterns within
broader environmental constraints and supply side factors. In seeking to achieve this,
this research examines business strategies, retail specific employment relations literature
and the Australian employment relations context. Furthermore, this study addresses the
issue of retail employment strategies at several levels within one of Australia’s market-
leading food retailers: corporate level, store level and at the level of individual
departments within the store. In doing so, this thesis highlights the differences in labour
usage between stores and between departments within the stores and thereby provides a
more detailed picture of the labour use practices within food retailers.
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STATEMENT OF ORIGINALITY
This work has not been previously submitted for a degree or diploma in any university.
To the best of my knowledge and belief, the thesis contains no material previously
published or written by another person except where due reference is made in the thesis
itself.
Robin Anne Price
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TABLE OF CONTENTS
ABSTRACT .....................................................................................................................I
STATEMENT OF ORIGINALITY............................................................................. II
TABLE OF CONTENTS .............................................................................................III
LIST OF FIGURES.................................................................................................... VII
LIST OF TABLES.....................................................................................................VIII
ACKNOWLEDGMENTS............................................................................................ IX
ABBREVIATIONS.........................................................................................................X
CHAPTER ONE ............................................................................................................. 1
1.1 The Research Question......................................................................... 1
1.2 Significance of the Research Question................................................. 4
1.3 Justification for the Research ............................................................... 4
1.4 What This Thesis Does......................................................................... 7
1.5 Research Methodology......................................................................... 8
1.6 Structure of the Thesis........................................................................ 13
CHAPTER TWO.......................................................................................................... 16
2.1 Literature on Retail Business Strategies............................................. 17
2.1.1 Industry Concentration ....................................................................... 18
2.1.2 Supermarkets as a Retail Format and Marketing Strategies............... 22
2.1.3 Diversification .................................................................................... 25
2.1.4 The Supply Chain and Supplier Relationships................................... 26
2.2 The Retail Literature on Structuring Employment............................. 29
2.2.1 Centralisation of Operations to Enhance Financial Control............... 31
2.2.2 Relocation of Control from Stores to Head Office............................. 33
2.2.3 Increasing Complexity of Management Task..................................... 34
2.2.4 Matching Customer Demand and Labour Usage ............................... 36
2.3 Employment Relations Strategies in the Retail Industry.................... 39
2.3.1 Recruitment ........................................................................................ 40
2.3.2 Remuneration ..................................................................................... 41
2.3.3 Organisational Culture........................................................................ 42
2.3.4 Training .............................................................................................. 43
2.4 The Importance of Store Operator...................................................... 44
2.5 Conclusion .......................................................................................... 46
CHAPTER THREE...................................................................................................... 47
3.1 General Theories of Structuring Employment Within Firms ............. 47
3.2 The Structure of Retail Employment.................................................. 53
3.3 The Structure of Retail Employment in Australia.............................. 54
3.4 Segmentation of the Retail Workforce ............................................... 58
3.5 Part-time Employment........................................................................ 61
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3.5.1 Benefits of Part-time Employment for Employers ............................. 62
3.5.2 Costs of Part-time Employment for Employers ................................. 63
3.5.3 Benefits of Part-time Employment for Employees............................. 65
3.5.4 Costs of Part-time Employment for Employees................................. 66
3.6 Casual Employment............................................................................ 67
3.6.1 Benefits of Casual Employment for Employers ................................. 69
3.6.2 Costs of Casual Employment for Employers ..................................... 70
3.6.3 Benefits of Casual Employment for Employees ................................ 70
3.6.4 Costs of Casual Employment for Employees ..................................... 71
3.7 Feminisation of the Retail Workforce ................................................ 72
3.8 Deskilling ........................................................................................... 74
3.9 Youth Employment ............................................................................ 75
3.10 Turnover ............................................................................................. 75
3.11 Research Agenda ................................................................................ 78
3.12 Conclusion .......................................................................................... 81
CHAPTER FOUR ........................................................................................................ 82
4.1 Economic and Technological Change ................................................ 82
4.2 The Push for Increased Flexibility in Labour Utilisation................... 86
4.3 Regulatory Constraints on Australian Retailers ................................. 89
4.3.1 Trading Hours..................................................................................... 89
4.3.1.1 Independent Retail Shop..................................................................... 90
4.3.1.2 Exempt Shops ..................................................................................... 90
4.3.1.3 Non-exempt Shops ............................................................................. 90
4.3.2 Restrictions on Business Ownership and Practices ............................ 92
4.3.3 Industrial Relations Legislation.......................................................... 92
4.3.4 Trade Unions and Employer Associations in the Retail Industry ...... 95
4.4 Labour Market Change....................................................................... 97
4.5 Conclusion .......................................................................................... 98
CHAPTER FIVE .......................................................................................................... 99
5.1 Business Strategy of FoodCorp Organisation .................................... 99
5.2 Organisational Structure ................................................................... 101
5.2.1 Store Organisational Structure ......................................................... 104
5.2.2 Store Management Structure ............................................................ 106
5.2.2.1 Store Managers’ Responsibilities ..................................................... 107
5.2.2.2 Store Trading Managers’ Responsibilities ....................................... 109
5.2.2.3 Store Services Managers’ Responsibilities ...................................... 109
5.2.2.4 Department Managers’ and Assistant Department Managers’
Responsibilities................................................................................. 109
5.3 FoodCorp Human Resource Policies and Practices ......................... 111
5.3.1 Recruitment Policies and Procedures ............................................... 112
5.3.2 Induction........................................................................................... 114
5.3.3 Training and Development ............................................................... 115
5.3.4 Career Progression............................................................................ 118
5.3.5 Performance Management................................................................ 119
5.3.6 Dismissal and Turnover.................................................................... 120
5.3.7 Remuneration Policies and Classification of Duties ........................ 121
5.3.7.1 Exempt employees............................................................................ 121
5.3.7.2 Full-time employees ......................................................................... 122
5.3.7.3 Part-time employees ......................................................................... 122
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5.3.7.4 Casual employees ............................................................................. 123
5.3.7.5 Trainees ............................................................................................ 123
5.3.7.6 Apprentices....................................................................................... 123
5.3.7.7 Contractors ....................................................................................... 124
5.3.8 Wage Rates ....................................................................................... 124
5.3.8.1 Apprentices....................................................................................... 125
5.3.8.2 Youth Rates ...................................................................................... 125
5.3.9 Additional Employment Benefits ..................................................... 127
5.3.10 Staff Dress Policies........................................................................... 128
5.4 Calculating Staffing.......................................................................... 128
5.4.1 Rostering Staff.................................................................................. 130
5.4.2 Calculating Staffing for the Front End ............................................. 131
5.4.3 Monitoring Working Time and Payroll ............................................ 133
5.5 Discussion......................................................................................... 134
5.6 Conclusion ........................................................................................ 135
CHAPTER SIX ........................................................................................................... 136
6.1 Characteristics of Retail Employment in FoodCorp Limited........... 136
6.2 Case Study Store A........................................................................... 138
6.2.1 Structure of Employment in Store A ................................................ 139
6.3 Case Study Store B........................................................................... 141
6.3.1 Structure of Employment in Store B ................................................ 143
6.4 Case Study Store C........................................................................... 145
6.4.1 Structure of Employment in Store C ................................................ 146
6.5 Working Time Arrangements........................................................... 150
6.6 Discussion......................................................................................... 157
6.7 Conclusion ........................................................................................ 158
CHAPTER SEVEN .................................................................................................... 159
7.1 Characteristics of Labour Use by Department ................................. 159
7.1.1 Grocery or Dry Goods Department .................................................. 159
7.1.2 Bakery Department........................................................................... 163
7.1.3 Meat Department .............................................................................. 165
7.1.4 Delicatessen Department .................................................................. 166
7.1.5 Fish Department ............................................................................... 168
7.1.6 Perishables Department .................................................................... 169
7.1.7 Fresh Produce Department ............................................................... 170
7.1.8 Variety Department .......................................................................... 171
7.1.9 Front End .......................................................................................... 172
7.1.10 Non Trade Department ..................................................................... 179
7.2 Discussion......................................................................................... 183
7.3 Conclusion ........................................................................................ 186
CHAPTER EIGHT .................................................................................................... 187
8.1 Consequences of the Labour Use Strategies for FoodCorp.............. 187
8.1.1 Staff Turnover .................................................................................. 187
8.1.2 Recruitment Problems ...................................................................... 189
8.1.3 Resistance to Changes to Hours ....................................................... 191
8.1.4 Control Issues Related to Casual Employees ................................... 192
8.2 Consequences of the Labour Use Strategies for Employees ............ 194
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8.2.1 Employee Survey.............................................................................. 195
8.2.1.1 Survey Methodology ........................................................................ 195
8.2.1.2 Survey Sample Characteristics ......................................................... 198
8.2.2 Employment Status........................................................................... 199
8.2.3 Tenure............................................................................................... 200
8.2.4 Working Time Duration ................................................................... 201
8.2.5 Employee Control over Working Time ............................................ 203
8.2.6 Satisfaction with the Job and Organisation ...................................... 206
8.2.7 Pay .................................................................................................... 207
8.2.8 Work Intensity .................................................................................. 208
8.2.9 Working on Sundays ........................................................................ 209
8.2.10 Career Paths...................................................................................... 210
8.2.11 Performance Management................................................................ 211
8.2.12 Training ............................................................................................ 213
8.2.13 Deskilling ......................................................................................... 213
8.3 Conclusion ........................................................................................ 214
CHAPTER NINE........................................................................................................ 216
9.1 Key Findings and Implications......................................................... 216
9.1.1 Theories of Retail Business Strategies ............................................. 217
9.1.2 Theories of Structuring Employment ............................................... 218
9.1.3 Theories of Restructuring Retail Employment................................. 226
9.1.4 The Retail HR Literature .................................................................. 229
9.1.5 The Consequences of the Labour Use Strategies ............................. 231
9.2 Implications for Theory .................................................................... 235
9.3 Implications for Practice................................................................... 236
9.4 Limitations of the Research.............................................................. 239
9.5 Suggestions for Further Research..................................................... 239
Appendix A FoodCorp Interview Schedule .......................................................... 241
FoodCorp Documentation ................................................................ 242
Appendix B Supermarket Employment Survey.................................................... 243
Appendix C Letter of Introduction........................................................................ 246
References ........................................................................................ 247
QGIG Cases and Decisions .............................................................. 265
Legislation ........................................................................................ 265
Awards.............................................................................................. 265
Certified Agreements........................................................................ 265
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LIST OF FIGURES
Figure 3.1 Atkinson’s Flexible Firm Model ............................................................ 50
Figure 3.2 Level of Full-time Employment, Food Retail, Australia........................ 55
Figure 3.3 Level of Part-time Employment, Food Retail, Australia........................ 55
Figure 3.4 Composition of Part-time Employment, Food Retail, Australia ............ 56
Figure 3.5 Composition of Employment, Retail, By Age, Australia....................... 57
Figure 3.6 Composition of Employment, Retail, by Hours Worked, Australia....... 58
Figure 5.1 FoodCorp Corporate Organisational Chart, 2002................................. 101
Figure 5.2 FoodCorp Regional Operations Organisational Chart, 2002 ............... 103
Figure 5.3 FoodCorp Human Resources Organisational Chart, 2002 ................... 104
Figure 5.4 FoodCorp Store Management Structure ............................................... 107
Figure 6.1 Hours Worked by Number of Employees, Store A .............................. 151
Figure 6.2 Hours Worked by Number of Employees, Store B .............................. 153
Figure 6.3 Hours Worked by Number of Employees, Store C .............................. 155
Figure 6.4 Hours Worked by Employees, All Stores, 2003................................... 157
Figure 7.1 Number of Employees by Hour, Monday, Front End, Store A, 2002 .. 174
Figure 7.2 Number of Employees by Hour, Thursday, Front End, Store A, 2002 175
Figure 7.3 Number of Employees by Hour, Saturday, Front End, Store A, 2002 . 175
Figure 9.1 FoodCorp’s Flexible Firm Model......................................................... 219
Figure 9.2 Dual Labour Market Model.................................................................. 225
Figure 9.3 FoodCorp Internal Labour Market Model ............................................ 225
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LIST OF TABLES
Table 5.1 Store Manager Accountabilities and Key Performance Indicators .......... 108
Table 5.2 Wages by Classification, FoodCorp, at 23 November 2003 .................... 124
Table 5.3 Youth Wages, Percentage of Minimum Adult Rate ................................. 125
Table 5.4 Wage Comparison, Adult Grocery Employees, Store A, 2003 ................ 126
Table 6.1 FoodCorp Ltd, Employees by Employment Status and Gender, 1999..... 137
Table 6.2 FoodCorp Supermarkets, Total Employees by Employment Status and
Locality, 1998........................................................................................... 137
Table 6.3 Total Employees Store A, 2002................................................................ 140
Table 6.4 Total Employees Store A, 2003................................................................ 141
Table 6.5 Total Employees Store B, 2002................................................................ 143
Table 6.6 Total Employees Store B, 2003................................................................ 144
Table 6.7 Total Employees Store C, 2002................................................................ 147
Table 6.8 Total Employees Store C, 2003................................................................ 148
Table 6.9 Average Working Time per Employee, by Store, 2002, 2003 ................. 150
Table 6.10 Hours Worked by Employment Status, Store A....................................... 152
Table 6.11 Hours Worked by Employment Status, Store B ....................................... 154
Table 6.12 Hours Worked by Employment Status, Store C ....................................... 156
Table 7.1 Hours Worked by Store, Front End 2003 ................................................. 173
Table 7.2 Number of Workers by Shift Length, Saturday, Store A, 2002 ............... 176
Table 8.1 Frequency Percentages, All Survey Respondents, 2003 .......................... 203
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ACKNOWLEDGMENTS
I owe thanks to a number of people who have helped make this thesis a reality. First,
thanks go to my initial supervisors, Cameron Allan and Kaye Broadbent, for getting me
started. Second, my thanks and gratitude go to my ongoing supervisors, David Peetz
and Rebecca Loudoun, who were there at the end. Thanks also to those in the
Department of Industrial Relations who had the faith in me to fund my initial
scholarship. I could not have done it without you.
I would also like to thank Samantha Lynch, now at the University of Kent, with whom I
published on the way through. The process of comparative research enabled me to
clarify my thinking. Thanks also for allowing me to use ‘checking out’ in the title.
I would also like to thank my partner, Michael, and my children, Alexandra and Kate,
for putting up with the loss of household income, the condition of the house and my
extended absences.
Finally, thanks to the other long-suffering research higher degree students in the
Department of Industrial Relations, especially Linda Colley, for the coffee, alcohol and
other sanity saving interventions.
Some of the material included in this thesis has previously been published:
Price, R. (2004) ‘Flexible Workers in Supermarkets: Core-periphery HR for the flexible
firm’ Refereed proceedings of the 18th Conference of the Association of
Industrial Relations Academics of Australia and New Zealand, Noosa,
Queensland, 3-6 February 2004.
Price, R. (2003) ‘Reaping what you sow: the effects of casual employment on
employers’ Refereed Proceedings of the 17th Conference of the Association of
Industrial Relations Academics of Australia and New Zealand, Melbourne,
Australia, 4-7 February 2003.
Lynch, S. and Price, R. (2003) ‘Checking Out Flexible Working: A comparative study
of UK and Australian Grocery Retailing’ Presentation to International
Employment Relations Association Conference, University of Greenwich, UK,
8-11 July 2003.
Price, R. (2002) ‘So many casuals, so little time; employee utilisation in supermarkets’
Refereed Proceedings of the 16th Conference of the Association of Industrial
Relations Academics of Australia and New Zealand. Queenstown, NZ, 6-8
February 2002.
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ABBREVIATIONS
ABS Australian Bureau of Statistics
ACCC Australian Competition and Consumer Commission
AIRC Australian Industrial Relations Commission
ARA Australian Retailers’ Association
ASTEC Australian Science and Technology Council
ATM Automatic Teller Machine
AWA Australian Workplace Agreements
AWU Australian Workers’ Union of Employees
CEO Chief Executive Officer
CGM Chief General Manager
CODB Cost Of Doing Business
DIY Do It Yourself
EDI Electronic Data Interchange
EFTPOS Electronic Funds Transfer at Point Of Sale
EPOS Electronic Point Of Sale
FQSCA FoodCorp Queensland Supermarket Certified Agreement
FT Full-Time
GM General Manager
HR Human Resources
KPI Key Performance Indicator
NARGA National Association of Retail Grocers of Australia
NLCC National Labour Consultative Council
NRA National Retail Association (was RAQ until May 2003)
OEA Office of the Employment Advocate
PPT Permanent Part-Time
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QIRC Queensland Industrial Relations Commission
QGIG Queensland Government Industrial Gazette
QRTSA Queensland Retail Traders and Shopkeepers Association
RAQ Retailers’ Association of Queensland
RFID Radio Frequency Identification
RGICC Retail Grocery Industry Code of Conduct
SCM Supply Chain Management
SDA Shop, Distributive and Allied Employees’ Association
2IC Second-In-Charge
3IC Third-In-Charge
UK United Kingdom
UPC Universal Product Codes
US United States
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