Costco, McDonald’s, and Chipotle face the same big problem

With the holiday retail season already drawing near, many major retailers and restaurants have already begun their hiring efforts to pull in the workers they need to handle the yearly increase in foot traffic.

However, they are facing an alarming problem that has been gaining steam since the covid pandemic: retail workers are quitting in droves 70% higher than the overall U.S. quit rate, according to a 2022 McKinsey study.

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The post-pandemic retail effect

While working in retail and food service has never been a cakewalk, increased demands born during the pandemic are putting more pressure on workers as both online and curbside pickup orders are rising to new levels, having become an expected service after being offered during the pandemic.

There’s also a much more troubling issue that’s escalating: customer violence towards associates. The National Retail Association reported in 2022 that nearly four out of five companies have seen a rise in such behavior, making showing up to work long hours for low pay even less appealing.

While many retailers have responded to the issue over the past few years by offering higher hourly wages, a few extra dollars an hour aren’t enough to appeal to many, especially those in fear of being yelled at or even injured by customers at work. 

Many retail workers have taken to TikTok and other social platforms to talk openly about the experiences they are having, citing instances of verbal abuse, theft, and more.


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‘Investment is critical’

Neil Saunders, managing director of GlobalData’s retail division, believes that retailers can address the issue in a few different ways. 

“Working in retail is hard. Resourcing has become more of an issue, tasks are more complex due to omnichannel, customers are more demanding, and now there are various safety issues from areas like the pandemic and crime,” he wrote in a comment on RetailWire. 

“It is hardly surprising that so many are quitting. Retailers need to make more effort to provide training, create interesting working environments, be flexible with hours, and reward through pay. Not treating staff well spirals into a poor customer experience which then spirals into reduced sales. Investment is critical.”

Chains have been handling worker turnover in different ways. Costco (COST) – Get Free Report, which is known for having lower-than-average turnover, has been using more self-checkouts. Chipotle has been testing automation while McDonald’s has moved much of its ordering to kiosks and its app.

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