Apple Retail Stores Reportedly Dealing with Budget Cuts and Focus on Revenue

Coquitlam Apple Store; Image via @alexglee

Earlier we had heard about rumours of Apple retail stores getting budget cuts by reducing the number of staff, to which Apple responded they had “messed up.”

Now, ifoAppleStore goes on to further report there are continued stories about how Apple’s retail operations continue to be put under stress due to a continued focus on revenue, due in part to the new strategy put into place by newcomer SVP John Browett (Ron Johnson’s recent replacement):

Sources say employee performance standards have changed to emphasize the employee sales functions, more small products will be stocked at the stores, and that several budget categories have been slashed, including for store maintenance. All the while, morale continues to drift lower among many retail store employees.

ifoAppleStore relays sources say employee sales metrics are used to determine raises, but those sales are being impacted by EasyPay app purchases, which credit stores instead of employees for purchases. Other declines in maintenance budgets have some to believe the trademark cleanliness of stores will be in jeopardy.

Where did this sudden change come in one of the most successful retail operations in history? It comes back to the departure of the first Senior Vice-President of retail, Ron Johnson. He was able to convince Steve Jobs retail stores should focus on the customer experience first over revenue and profit.

But when Jobs took a medical leave of absence in 2009, Cook and chief financial officer Peter Oppenheimer reportedly pressured Johnson to have stores focus more on revenue, to justify their huge operating expense. Without Jobs in his corner, Johnson eventually had to capitulate to Cook and Oppenheimer.

Speaking with our own Apple retail store source, he noted “it’s appalling what has occurred in the retail stores over the last eight months,” and basically agreed with what sources have noted to ifoAppleStore. I can only hope Apple continues to maintain its customer-centric focus for its retail stores. With Apple Stores seemingly always filled to the brim, a cut in staffing numbers will surely hurt everyone, especially during product launches and peak shopping periods.

Have you noticed anything different at your local Apple Store in the past six months?