ReThink Productivity
Smart Strategies for Operational Productivity

Simon Hedaux, Co-Founder

The £6.25 Billion Productivity Opportunity

Research (2020-2025) by ReThink Productivity reveals that UK retailers leave 14% in optimisation costs on the table due to ineffective shopfloor time. With rising labour costs and a living wage rate of £12.71 per hour, this is an opportunity to address.

ONS data estimates the retail workforce at 2.6 million associates, working an average of 26-30 hours weekly. A baseline of 26 hours at the living wage represents an annual labour bill of £44.7 billion. 14% optimisation shortfall translates to a £6.25 billion annual missed opportunity. Co-founders Simon and Sue Hedaux stress that ignoring this drain is a major corporate risk.

The Store Productivity Paradox & The Efficiency Index (EI)

To counter cost pressures, firms have driven leaner operations. On the surface, data suggests success: most stores now achieve an 80% Efficiency Index (EI). However, a recent BRC survey of retail CFOs reveals deep anxiety: 69% are pessimistic about new rules under the Employment Rights Act, 84% rank employment costs as a top concern, and 52% plan to reduce staff hours. This highlights the 'Productivity Paradox': teams appear efficient on paper, yet are under-resourced when footfall peaks. Stretched teams face a 'capacity ceiling,' creating checkout lines, poor customer experience and tasks that don’t get done.

The analytical calculation behind this report is the Efficiency Index (EI), calculated by multiplying time spent on essential tasks by the pace of execution. A pace of 100 defines a sustainable, 'brisk and business-like' shift speed. While 100% EI implies zero breaks, ReThink advises a target of 80% for customer-facing environments. Because two-thirds of retailers have already reached this level, further optimisation requires a strategic rebalancing of core store activities.

The Six Golden Rules to Maximize Store Performance

Rule 1: Rethinking Efficiency – Why More is Not Always More

Efficiency is a balancing act and should free up capacity for service and selling, not squeeze it out. Pushing an EI past the recommended 80% threshold yields colleague fatigue and operational fragility, stripping out the headroom required to absorb late deliveries or sudden demand surges, for example. True resilience involves removing low-value complexity to free up capacity for customer service.

Case Insight (East of England Co-op): CEO Andy Rigby says "Productivity is not just about cost-cutting or customer-facing outcomes. It is fundamentally linked to colleague experience and sustainability.” He cites rolling out Electronic Shelf Label technology as a great example of improving efficiency and colleague job satisfaction.

Rule 2: Managing Capacity Intelligently – Overcoming the Capacity Cap

Allocating labour too tightly removes the flexibility to respond to peak customer demand. Real productivity means converting labour hours into sales. Sales-led retailers must deliberately invest in capacity during peak hours—even if efficiency drops—while focusing quieter windows on tasks such as replenishment.

Case Insight (Holland & Barrett): Director Lisa Widdison aligns labour to peak wellness shopping times to provide visible, knowledgeable wellness advisors, while using quieter windows for deeper customer conversations, replenishment, compliance.

Rule 3: Simplifying Security – Stock Protection to safeguard, not erode, profitability

Security interventions are often implemented reactively without factoring in labour impact. ReThink's studies show that manually applying a soft tag takes an average of 15.3 seconds, and a bottle lock takes 11.8 seconds—costing over 8 pence per item at the living wage. Retailers must evaluate if blanket tagging costs more than the stock losses prevented.

Security-savvy retailers use a thoughtful mix of physical solutions, smart product tagging, and simple routines to protect stock without compromising great customer service.

Rule 4: Unlocking Self-Checkout Potential – Systemic Optimisation

Self-checkout efficiency is undermined by a high frequency of interventions, with up to one in three transactions requiring colleague assistance. These interruptions are driven by factors such as poor system configuration and over-sensitive weight scales rather than customer behaviour. Self-checkouts must be optimised to add speed, simplification and satisfaction and avoid simply shifting workload.

Rule 5: Designing Services Deliberately – Navigating Omnichannel Complexity

Services like click-and-collect, parcel collection, and loyalty administration bring customer benefits and operational complexity. Parcel retrieval time ranges from 20 seconds to over three minutes, while manual loyalty registration adds up to 30 seconds per transaction. Services should drive incremental value, not overwhelm or distract teams.

Case Insight (Holland & Barrett): Director Lisa Widdison said "Services like H&B&Me and click-and-collect are key to retention and omnichannel growth, so they are not separate from customer experience – they’re part of it."

Rule 6: Deploying Technology Pragmatically – Process Alignment

Technology ROI varies widely. While foundational tools like electronic shelf labels eliminate manual workload, more advanced tools like AI weather forecasting can become redundant unless the retailer's supply chain and labour models are flexible enough to respond to shifts. Technology must amplify human capability, not complicate it.

Case Insight (Morrisons): Productivity Director Gordon Macpherson is focused on “introducing advanced product recognition and AI systems that actively reduce the need for colleague intervention in routine tasks, allowing teams to transition to proactive engagement."

Conclusion: From Lean to Future-Ready

The retail sector has reached an inflection point where retailers cannot afford to waste 14% of their staff budget—equivalent to an entire day of labour every single week. Traditional cost-focused lean strategies have reached their structural limits.

The future of retail productivity belongs to balance. By adopting the Six Golden Rules outlined in the report, forward-thinking operators can build resilient, customer-centric store environments. Utilising productivity not as a blunt instrument for headcount reduction, but as a sophisticated lever for revenue growth will separate the market winners from the losers.

Read it here: The ReThink Productivity Retail Report 2026