Tesco’s CEO isn’t the only commander-in-chief to have started out on the shop floor. But what is it about the sector that makes such meteoric rises possible? Catherine Wheatley, armed with our new salary survey, investigates

Outstanding promotion prospects’ is a job advertisement cliché, but in grocery retailing, some stellar success stories hint at truth in the well-worn phrase.

Just ask Philip Clarke. He began his Tesco career as a 14-year-old, taking a holiday job stacking shelves in the stores his father managed. After graduating from Liverpool University, he joined the retailer’s management training programme. Three decades later, after stints in charge of Tesco’s supply chain, information technology and overseas business, he was appointed chief executive last March on a basic salary of £1.1m, rising to almost £7m this year if he hits all his performance targets.

Clarke is not alone in climbing the career ladder from the lowest rungs of food retailing all the way to the top. Asda boss Andy Clarke joined the company as a store manager. Via a brief detour to Iceland and then Matalan, he took his place in the chief executive’s chair 18 years later. David Potts, who was appointed head of Tesco’s Asian business last March, started working on a meat counter at one of the company’s Manchester supermarkets at the ripe old age of 16 before becoming its youngest-ever store manager in his early twenties. And Waitrose managing director Mark Price joined the John Lewis Partnership as a graduate trainee (former Marks & Spencer chief executive Sir Stuart Rose also joined the company as a trainee manager).

So what is it about the sector that makes it possible for talent to rise through the ranks from the storeroom to the board room? Is it an ability to recruit and retain the most talented graduates? Is it a commitment to training the most promising customer assistants? Or is it offering the right pay and perks to motivate the best managers? The Grocer’s salary survey, carried out by the recruitment agency Retail Human Resources (RHR), sheds some new light on the question.

Naturally, wages are an important part of the equation. If you pay peanuts, you get monkeys, according to the old saying. That’s why supermarkets are prepared to offer the managers of their largest stores up to £90,000 a year, according to our research. An area manager could earn up to £180,000 per annum while supervisors are paid up to £20,000.

The pay of those working in other types of outlet compares equally well with other sectors. The manager of a large convenience or in-town store might expect to pull in an annual salary of up to £45,000, for value retailers the figure would be close to £50,000 and for wholesale outlets it might reach £75,000.

Performance-related pay and other perks are an important part of the overall package in grocery retail. A typical bonus may be up to 20% of basic salary, our research reveals. Many companies offer profit-share schemes to align pay with overall company performance. Tesco is one of only four FTSE 100 companies to offer a defined benefits pension scheme, while Aldi promises graduates an Audi and private healthcare.

Finding a food and drink retailer that is prepared to talk openly about pay and perks is difficult. It’s a sensitive subject, especially when economic times are hard. Publicly, the talk is of moderation and belt-tightening. Philip Clarke’s remuneration is notably more modest than that of his predecessor Sir Terry Leahy, who took home £12m in pay, bonuses and long-term share options last year. Last month, the company announced that it would stop giving share options to senior executives in response to pressure from shareholders.

Privately, the big retailers are happier to admit that they will pay to recruit and retain top talent. There is plenty of evidence to substantiate this last March, for example, Morrisons gave its finance director Richard Pennycook shares worth £1.25m following former chief executive Marc Bolland’s defection to Marks & Spencer. Graduates who join the notoriously tough training scheme at Aldi earn £40,0000, higher than almost any other graduate recruiter is prepared to pay, according to a recent survey published in the Financial Times. “Of course we pay to get the best people,” admitted one HR manager from a major supermarket chain.

But as tough trading conditions persist, are grocery retailers offering more or less than last year to employees? “From what we are seeing, the downturn has depressed levels of pay,” says Peter Burgess, RHR’s managing director. “Salaries have not been cut, but they are not keeping pace with inflation and the cost of living.”

Quoted retailers might make a virtue of reining in executive pay, but they are less willing to admit that real pay on the shop floor could be falling. Tesco is poised to announce that, following a salary review, it pays customer assistants more than any other supermarket, while Aldi stresses its generous graduate remuneration.

“We already pay market-leading salaries and intend to maintain the premium against our competitors, to reflect the level of responsibility and autonomy that is given to our managers,” says Richard Holloway, Aldi’s regional managing director.

The salaries on offer prove that grocery retailing is a rewarding career where the best can make it to the boardroom, according to Richard Dodd at the British Retail Consortium. “These figures are clear evidence that there is a really strong career progression you can follow,” he observes. “Like all organisational structures, retailing is a pyramid and not everyone can make it to the top. But it’s certainly true that talent and hard work will be rewarded.”

Encouragingly, the number of store jobs advertised is expected to keep rising. Morrisons expects to create 6,000 new positions this year, for example, while Aldi wants to recruit 250 customer assistants, 20 trainee store managers and 60 area managers.

On the other hand, as unemployment continues to rise there is growing competition for the posts on offer. When Morrisons chief executive Dalton Philips attended one of the company’s employment road-shows last month, he was greeted by an unexpectedly high turnout. “The event was packed and it felt like there were a lot of people hungry for work,” says a spokesman.

Aldi’s Holloway agrees. “We are receiving more applications from graduates and from individuals looking to change jobs, maybe due to a lack of job security in their current organisation or sector.”

Unfortunately, job opportunities in grocery are not necessarily as abundant as they once were, says RHR’s Burgess. “Grocery sales are holding up well considering, although we are still waiting to see the fallout from government cuts,” he says. “We have not seen a massive increase in applications from graduates or jobless people. But what we have noticed is that people who leave are not being replaced.”

Those lucky enough to secure a job with a company that is replacing those who leave have a potentially fantastic career ahead. For Burgess and many others, what makes grocery retailing such a great career choice for those aiming for the boardroom is the amount and quality of training on offer. For example, Tesco now offers a foundation degree in retailing at Manchester Metropolitan University as well as a career programme, called Options, which offers tailored training to staff who show potential. Outstanding training helped Iceland Frozen Food leap to sixth place in this year’s Sunday Times ‘Best Companies to Work For’ list. And Morrisons provides more government-approved modern apprenticeships than any other UK employer.

Many believe it is the sector’s commitment to training that makes it possible for staff to climb to the top of the career ladder. “We are a meritocracy,” confirms a Tesco spokesman. “It doesn’t matter whether you are an Oxbridge graduate or you left school without qualifications. You are judged purely on your work.”

Of course, blue-chip employers in every other sector would say much the same. But what sets grocery retailing apart is the pace and complexity of a business that encompasses not only customer service and staff management, but also marketing, packaging, supply and distribution for many thousands of products, often across several continents.

Graduate trainees can soon find themselves running a store employing over 600 staff and turning over up to £500m. And, as Burgess notes, they are managing not only other university-educated staff but employees who are sometimes working for little more than the minimum wage, in “an operation that is bigger than most British businesses”.

Grasping the unique scale and intricacy of retailing from the bottom up can be an invaluable grounding for a career in the higher reaches of a company. “Retailing is a world where you learn with both your hands and your head. We value the skills and the specialisms that our staff learn in stores,” says a Morrisons spokesman. Indeed, two Morrisons directors, Mark Harrison and Martin Fletcher, have worked their way up from the shop floor.

Salary and other perks, then, are the carrots dangled to entice ambitious staff up the career ladder. Training offers employees a roadmap to the highest reaches of the profession. But what really propels the best staff is their deep experience of a complex, challenging business. For a complete understanding of the sector, the journey from shop floor to top floor is not only possible but, some would say, necessary.

The Grocer’s salary survey was carried out by recruitment agency Retail Human Resources (RHR). The agency collected salary information from more then 1,000 interviewees, across all retail management and buying & merchandising positions.

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