Customer service is collapsing in high-tax Britain

Telegraph

2 days ago

Want to pick up some groceries after a late night at the office? Forget it. Or, if you can get to a supermarket, fancy grabbing a coffee after traipsing around with a couple of kids? It's no longer possible.
Trying on a pair of jeans at the clothes shop? Good luck finding someone to help you.
One by one, companies are cutting back on opening hours, reducing checkout staff and cutting in-store services. Many are closing branches completely.
Following the huge rise in employment taxes imposed by the Government, bosses don't have much choice. Companies have to save money on staff somehow. But with every cut they make, the experience gets a little worse.
In Labour's high-tax Britain, customer service is dying – and we will all end up poorer as a result.
It has been a worrying few weeks for anyone who cares about the quality of customer service. Self-checkouts are becoming more ubiquitous, opening hours are getting shorter and manpower is being cut back.
Over the weekend, we learnt that Tesco is trialling the closure of some of its Express stores at 10pm rather than 11pm, and will have fewer staff on hand for the hours that they remain open.
It is not hard to guess why: after Rachel Reeves's recent increase to employers' National Insurance, the company has said it will have to pay an extra £235m in contributions.
That is just the latest example of a broader trend.
The self-service checkout is proliferating even though it has become very unpopular with shoppers, and not just in the supermarkets. Next revealed earlier this year that it is to start trialling automated checkouts as it looks to find ways of coping with the extra £67m the chain estimates it will have to pay in employment taxes this year.
Others are slashing services. Morrisons said in March that it was closing down cafes in its stores, along with florists and specialist meat counters. Sainsbury's said that it would lose 3,000 jobs by closing down in-store cafes, bakeries and pizza counters.
The National Insurance increase was not directly blamed but both chains said they had to reduce costs.
There are even examples of pubs closing at 9pm so they can cut back on the staff hours, and therefore lower their tax bill. Add it all up, and one point is clear: the customer is no longer the number-one priority – bosses are more obsessed with managing costs.
There is no point in blaming the big chains for these decisions. After all, they are all commercial companies, and their primary duty is to their shareholders. If the Government is determined to tax them based on how many people they employ, instead of on their profits, then the only rational response is to skimp on staff as much as possible.
We may only be seeing the start of the process. Before long, there will be QR codes in place of waiters and waitresses at restaurants (after all, in fast food places it is already almost impossible to place an order with a human being any more).
Get ready for self-serving beer kegs at your local 'Spoons, while an app will check you into your hotel room, and the estate agent will just send you an AI-generated video link over actually showing you around the new home you were thinking of buying.
It won't be possible to interact with a human being any more.
Conventional economic statistics don't capture the impact of all this on our day-to-day lives.
If you spend £200 at the supermarket, that is an extra £200 added to the total GDP figure regardless of whether you had to struggle with a self-service checkout for 20 minutes or if you were whisked through the till by a smiling sales assistant who chatted to you and wished you a pleasant day as you left.
It may not make a difference to the economists but it makes a big difference to you.
Likewise, it doesn't make any difference to GDP if you have to rush out of the house or your office to get to Tesco Express at one minute to 10 because you don't have any food and it will close soon. But again, it makes a big difference to you.
A successful economy is not just about maximising raw output. It is about maximising total consumer satisfaction. As service levels collapse, GDP may stay the same, but we are all worse off in ways that the figures don't reveal.
More worryingly for the GDP statistics, companies can't innovate. The most successful businesses find new and original ways of delighting their customers.
It might be by staying open for different hours, or offering a broader range of services or products, or a more complete experience, or all sort of things that we have not thought of yet but which might prove very popular. The best ideas can then be taken out to the rest of the world.
And yet instead of encouraging companies to try out new ideas, we are forcing them to put all their energy into cutting staff. Over time, that will impact the competitiveness of the British economy.
The Chancellor may or may not raise the extra £25bn she is expecting from her increase in employers' National Insurance contributions. We will find out over the next few months as the tax starts to bite.
But the costs of the tax raid are becoming painfully clear. It will be measured in fewer jobs, lower wages, higher inflation and, perhaps worst of all, in a country characterised by poor service and declining innovation.
When you find the doors to Tesco Express closed at 10.01pm, at least you will know who to blame.