The Container Store Fifteen Years Later

When I was first asked to write a regular column for their brand new publication Loss Prevention magazine, Jack Trlica and Jim Lee suggested that I focus on the linkage between academic research and the day-to-day practice of loss prevention. Fifteen years ago my first column in the inaugural The Container Store Articleissue was a review of The Container Store.

Humble Pie for the Naysayers

Most of my research and the academic literature on employee dishonesty clearly made the argument that if you pay people adequately, treat them
well, and encourage them to remain with the company, they will have no reason to steal and will also become actively involved in protecting the company assets from shoplifters and employee theft. To prove this point, I selected a firm that met all of these criteria, namely, The Container Store.

In 2001, The Container Store was a 20-store chain that had extremely low levels of shrinkage, almost no turnover, high levels of job satisfaction, and excellent profitability while paying their employees an above-average wage. After I wrote about this retail company that had seemingly found the secret to low shrinkage, a number of readers pointed out that this level of success could not persist for long. After a total of 35 years of impressive growth, high profitability, and most importantly, low shrinkage, The Container Store is still thriving.

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The Container Store has been on Fortune magazine’s list of top 100 employers for a remarkable 17 straight years. Their last ranking was number 14. They still have shrinkage levels that are some of the very lowest in the nation while continuing to show a respectable profit margin. In 2001 CEO Kip Tindell (now chairman of the board) was quoted as saying, “A funny thing happens when you take the time to educate your employees, pay them well, and treat them as equals.” That is, retail stores can become remarkably successful.

I recently interviewed Joan Manson, vice president of loss prevention, benefits, payroll, and legal, who was proud to confirm that Kip Tindell was

Joan Manson
Joan Manson

right on the money. The Container Store now has over eighty stores generating over $700 million in annual sales and has even lower shrinkage now than in 2001, along with negligible turnover, higher job satisfaction, and beginning wages that are twice the average in the retail industry.

This company continues to prove the naysayers wrong. The Container Store demonstrates that you can build a sustainable chain with well-compensated employees who are paid far above the retail national average. The logic of their success is simple. These employees feel that they are part of a family environment that is a place where they love to work. In fact, most never leave the company. Why should they when full-time employees make on average more than $50,000 a year?

Job Satisfaction Is Key

At the very beginning, former Chairman Garrett Boone developed a set of basic customer service principles that were founded on constant training. In 2001 employees were given 235 hours of training. Now full-time employees receive 260 hours of training, and even part-time employees average 177 hours of training. All of this training obviously pays off on the bottom line. Moreover, The Container Store is proud that they have never laid off employees because of low sales.

Manson has been employed at The Container Store for virtually her whole career and is particularly proud of the fact that her CEO is a woman, Melissa Reiff. Manson reports that 15 years later, The Container Store is still an awesome place to work. She says that some even call it a fantasyland—not one that is based in fiction, but on hard data built on a foundation of logical retail planning, maximizing profitability, and yielding loss prevention success.

Most readers of this column know that I have been arguing for the benefits of high job satisfaction, which research has shown to yield high profits, minimal turnover, and low shrinkage. It is truly gratifying to see that 15 years later, this retail model continues to work so successfully at The Container Store. Perhaps it can work this well at your retail firm as well.

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