just wondering how most companies budget for meat. we run around a 6%.
but with increasing labor cost at lower level positions it get a little tight on slow weeks.
Morning Toby. In my working years I have always been a slave to either pounds per man hour or dollars per man hour. Both methods have their plus's and minus's. But it seems to me that 6% is really low. Sometimes you have to take more into consideration than just cutting, wrapping and displaying. I know that top-brass (especially the ones that never worked in a meat department) don't realize the other 50 things that go on in meat department operations. Like; paper work, removing garbage, cleaning & sanitizing, unloading trucks, store meetings, customer service, pricing, re-work and I can go on and on. I like to call that stuff (indirect labor).
Every supermarket company treats their labor cost information like it was "the holy grail " so all I can do for this example is use industry statistics.
Number of supermarkets-2014 ($2 million or more in annual sales )- 37,716 stores
Median weekly sales per supermarket-2014---$516,727
Sales per labor hour (median, )-2014 for the entire store was $148.00 sales per labor dollar.
So if we divide $516,727 by $148 that comes out to an average medium hours of approximately 3500 hours medium average.
If you take the 3500 hours and multiply by the average supermarket wage per hour (all departments included). I am going to use a little Kentucky Windage here and use ---$11.50 per hour that comes out to $40,151 (if you think its more or less just change the number. )
If you divide $40,151 by the total average median sales of $516727 that comes out to just about a 8% labor rate entire store.
One thing for sure Toby is that your 6% is below the norm.
Costco uses sales per man hour. Usually in the $500 to $700 per hour range depending on volume. I'm very low volume right now $70,000 a week running 500 per hour which with my cheap help still puts me at almost 8% payroll. So I agree 6% is really low unless sales are really high??
I've ran higher volume shops at 5% but that was in the years of 6 to 7 dollar clerk wages. Just seems tighter now with the increasing minum wage every year. Could be I'm just getting old too ...
5% is really low. Even the warehouses running $350,000 a week run 6 1/2% payroll but you have to figure the average hourly rate in Costco's meat departments run around $45 per hour which includes benefits and bonuses. Are benefits calculated into your payroll %? Our benefit rate is 45.5% of salaries!
Fringe benefits are not included it's just raw labor. I'm in a 50k average shop now we have only 2 part time people the other 5 are fulltime so it inflates average wage to 13.50 per hour for department average
New vice president is increasing payroll in the next budget
For me to have that much help I would have to do at least 150k a week to meet my numbers. But we just hunk and chunck with barely any customer service. Nothing like grocery stores. My meat cutters have gotten at least a .50 cent raise for the last 20 years every year every raise all they do is cut more hours from me. 5-10 hours a week every year for 20 years. So at least your new president either understands customer service to hire more or salaries are going up!
it all equals out to the same , down here in florida , publix supermarkets uses the I P L H system , {items per labor hour } and the goals go up every year . the price of meat has been going up yearly , sometimes makes it hard to increase items . keeps you on your toes !!!
