In an effort to increase sales and reduce the need for financing, clothing retailer Forever 29 has instituted a new remuneration policy that reduces wages to minimum wage but then pays a bonus each month based on the sales for each store location. The decision to markdown merchandise to improve sales is done at each location and of the five stores in Sydney, one store (Haymarket) is doing remarkably well by reducing prices and selling more than the other stores combined. In fact the other stores sales revenue have all been declining as Haymarkets has gone up. Management is concerned because the margins have fallen for the Haymarket store and the salaries component has increased dramatically even though revenues are very high.

You are one of the regional managers, do you have any concerns? (approximately 150 words)