How warehouses became British retail's dirty little secret

Sports Direct gets much of the flak but it's by no means alone.

Last Updated: 15 Dec 2016

No warehouse has garnered as much press attention as Sports Direct’s hulking complex in Shirebrook, Derbyshire, where workers toil all day to pick and pack cheap trainers, t-shirts and all manner of sports kit.

Controversial investigations by Channel 4 News and the Guardian shone a light into the way these workers, many of them employed via agencies, were treated. Tales of a woman giving birth in the toilets and ‘six strikes and you’re out’ rules shocked the nation and the company’s once-reclusive owner Mike Ashley was cast as the pantomime villain.

The goings-on at Sports Direct were unacceptable, but it’s increasingly clear the retailer’s practises are, if not universal, at least widespread in its sector. As long ago as 2013 Amazon’s Rugeley warehouse was under fire for its timed toilet breaks and monitoring workers with GPS trackers. At the weekend The Courier reported that cash-strapped Amazon workers in Scotland are paid so little that some are sleeping in tents to avoid paying to commute to its Dunfermline site.

In September a Buzzfeed investigation found Asos workers complaining they weren’t able to take breaks through fear of falling behind. And last week Channel 4 News revealed yet more complaints, this time about the Kingsway, Rochdale, warehouse of JD Sports. ‘It’s...worse than a prison,’ one employee said. ‘Prisoners get more frigging respect.’

So, how did retail warehouses come to provide such rich pickings for investigative journalists? The rise of online shopping is at least partly to blame. Having laid waste to British high streets, leaving many of them home to just a few bookies, charity shops and loan sharks, ecommerce has, by way of compensation, created a load of new jobs in ‘fulfilment’.

Warehouses used to be simple operations. If you needed to send 50 units of X and 70 units of Y to a particular shop, it was pretty straightforward to go and collect a few pallets and stick them in the back of a truck.

But nowadays it’s a lot more complicated. Orders are smaller and much more diverse. Warehouse workers need to find and pick all the products in shopper’s online baskets, and pack them all together. They effectively do the leg work a customer used to do, a casual stroll through a shop now replaced by a jog as workers rush to meet their targets.

As well as paying for all these workers, a company then has to drop those packages at its delivery company of choice, and pay them to actually take the products to the customer’s house.

The problem is many punters are not willing to pay for delivery - and certainly not enough to cover the real cost incurred. Asos customers get free standard delivery if they spend more than £20, and Amazon has similar rules depending on what you’re buying. Sports Direct is unusual in that it doesn’t have a free delivery option, but when you’re selling pairs of trainers for as little as £6.50 you have to find the margin somewhere.

Read more: How ecommerce is changing logistics 

Funding these logistics operations is expensive - especially so for fashion companies, many of whose customers return products after finding they don’t fit. And margins could get even finer in the future - in March property consultants Lambert Smith Hampton warned that demand for warehouse space could exceed supply by 25 million square feet by 2020, which would push up rents. In fiercely competitive markets it’s much easier to squeeze the humans responsible for actually fulfilling orders than it is to raise prices.

It doesn’t help that workers in these warehouses rarely get organised. Many are working on a casual basis and some are from overseas. Union membership is low, though Unite and its ilk have spotted a gap in their market – a GMB advert sits on the roundabout by the entrance to Asos’s premises.

And the uncomfortable truth is that it’s largely an issue of ‘out of sight, out of mind.’ On the high street, if you push your shop assistants beyond their limits it will be reflected in terrible customer service. But consumers never go near the warehouse, nor do they interact with the person that pops their new pair of shoes in the post.

Like the more noisy taxi and train drivers and postal workers, warehouse workers will probably find themselves replaced by robots in the coming years. Ocado’s warehouse in Andover has a thousand of them, skimming along the tops of crates looking for bundles of lemongrass and avocados. But until that becomes commonplace, expect to see more pictures of big boring buildings and hear more tales of mistreatment on the News at Ten.


Find this article useful?

Get more great articles like this in your inbox every lunchtime

Will the UK ever clamp down on corruption?

The UK's leniency towards corruption is damaging its global reputation, argues academic Oliver Bullough in...

WATCH: The "tough" leader who cried during an all-staff meeting

Showing emotions can be your greatest strength in times of crisis

The Big Pharma gender conundrum

The pharmaceutical industry is championing women in its workforce - but is failing to get...

How one profitable company manages the four-day week

CEO and owner of CMG Technologies, Rachel Garrett, makes every week a bank holiday for...

How can SMEs cope with the latest hike in inflation?

MT Asks: With the latest inflation update from the Bank of England crushing any business...

Karen Blackett

Leadership clinic: "How do I motivate my team when we're all exhausted?"

Karen Blackett OBE, UK country manager of WPP, Group M UK CEO and a former...