Sponsored By

Here’s what grocery executives made in 2022

Bonuses helped to balance pay scales for top executives in our 2023 SN Executive Grocery Salary Report

Mark Hamstra

July 11, 2023

5 Min Read
Supermarket-executive-salaries-illustration.png
While typical merit-based salary increases tend to be just a few percentage points above the base salary, bonuses can be much higher.Getty Images

Base salaries for many top executives in the supermarket industry saw little change in 2022, relative to the prior year, although mid- and lower-level corporate compensation edged up slightly.

That’s not to say the top executives were undercompensated for their work, however. Many earned significant bonuses based on their performance in what was another strong year for grocery industry sales, even if those sales were driven by inflation.

“When it’s a banner year for the industry, that tells you that it’s also going to be a banner year in terms of bonuses,” said Jose Tamez, managing general partner at Austin-Michael, a Golden, Colo.-based executive search firm specializing in grocery retail. “Many bonuses were even paid out above the maximum.”

While typical merit-based salary increases tend to be just a few percentage points above the base salary, bonuses can be much higher, said Tamez.

“This gives human resources and upper management some flexibility to maintain base salary rates and merit increases at a reasonable rate, knowing that many members of the workforce are still getting paid very well on the bonus side,” he said.

By relying more on bonus-based compensation strategies, companies can avoid the “cascading effect” that rising salaries can have throughout the organization, Tamez explained.

Bonuses are also favored by employees, who often see them as a welcome year-end windfall.

Data from Austin-Michael shows that for companies of all sizes, the base salaries of CEOs, chief operating officers and chief financial offers — the top-three highest paid positions in the industry — were all unchanged from 2021 to 2022. Salaries for the fourth highest-paid position, chief marketing officer, were also flat for the smallest companies (less than $2 billion in annual sales), while salaries for CMOs at mid-sized and large companies were up slightly. Chief information officers’ salaries were also flat from 2021 to 2022.

Annual base salaries for CEOs in 2022 raged from $645,000 at small chains, $910,000 at medium-sized companies ($2 billion - $10 billion in annual sales) and $1.9 million at large companies (with sales of more than $10 billion).

At the senior VP level and below, some salaries showed slight increases last year, compared with 2021, according to Austin-Michael research. Warehouse directors, for example, saw their salaries grow at retailers of all sizes, with base annual salaries increasing by about 5-6 percent — to $170,000 at small companies, $180,000 at mid-sized operators and $190,000 at the largest grocery retailers.

More skills are required

Tamez noted that the skills sets required for many corporate-level jobs in the supermarket industry have evolved significantly in the last few years, and often involve a high level of analytical capabilities, as data-driven decision making has become increasingly ubiquitous.

“People are adding more and more responsibilities in their positions — much more than they had just two, three or four years ago,” he said. “There is a lot more analytics involved in their jobs.”

Walmart, for example, has reorganized multiple times over the past several years, which Tamez said has helped the company ensure that its workforce has the skills that are required as the company’s technology and systems have evolved.

“It has led to some purging of the workforce in favor of people who have more analytical skills,” he said. “The typical buyer, for example, at Walmart today is much more analytics-driven and much more skills-oriented than they were two or three years ago, without question.”

New data analytics capabilities, the enduring popularity of ecommerce, and ongoing competitive pressures are all creating turmoil in the industry that is leading many retailers to rethink their labor needs and the responsibilities at each position, while at the same time striving for more efficiency and higher productivity.

“Any time an industry sector goes through disruptions and challenges, it causes companies to recalibrate and rethink what’s needed from the workforce going forward,” said Tamez.

He noted that often the mid- and lower-level corporate managers are most impacted by these types of recalibrations, as they are ones who are actually executing the company’s systems and procedures, while the more “managerial” skill set demands of the higher-level executives remain constant.

As the labor market has remained tight, with low unemployment levels and ongoing economic growth, retailers and wholesalers said labor has remained a top concern, according to SN’s third annual Retailer Expectations Survey, released earlier this year.

When asked what their biggest concern was in 2023, more than two thirds — 68% — cited labor, beating out inflation/cost increases at 65%.

The looming recession that many observers expect to arrive later this year could also have an impact on how supermarket operators approach their labor strategies, despite the fact that the industry is often thought of as being “recession-proof.”

“One thing you always hear about the supermarket industry is that people always have to eat, even during a recession,” said Tamez. “However, recessionary times will make competition for consumers’ food dollars more robust, and a byproduct of that would certainly be tightening up the workforce, or a slowdown in the expansion of the workforce.”

For example, an economic recession could lead retailers to use more third parties for some services, such as facilities maintenance or construction, rather than hiring people to perform functions in those areas, he said.

“Inflationary times only last so long,” said Tamez. “Once we get past that, then the grocery industry again has to reevaluate things, recalibrate, and possibly retool, but they've positioned themselves over the last few years to do that much more quickly, and much more effectively.”

About the Author

Mark Hamstra

Mark Hamstra is a freelance business writer with experience covering a range of topics and industries, including food and mass retailing, the restaurant industry, direct/mobile marketing, and technology. Before becoming a freelance business journalist, Mark spent 13 years at Supermarket News, most recently as Content Director, where he was involved in all areas of editorial planning and production for print and online. Earlier in his career he also worked as a reporter and editor at other business publications, including Financial Technology, Direct Marketing News, Nation’s Restaurant News and Drug Store News.

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like