AP

Are Retail Jobs In A Funk? It’s Complicated

May 3, 2019, 2:55 PM | Updated: Jun 8, 2022, 5:10 pm
(Photo by Tomohiro Ohsumi/Getty Images)...
(Photo by Tomohiro Ohsumi/Getty Images)
(Photo by Tomohiro Ohsumi/Getty Images)

NEW YORK (AP) — The overall economy is adding jobs, but there’s one spot that appears to be in a funk: retail.

Overall, U.S. employers added 263,000 jobs in April, according to the government data released Friday. The retail sector lost 12,000 jobs that same month.

That decline wasn’t a blip; the sector has shed 49,100 jobs in the past 12 months despite the faster pace of economic growth.

Retail job losses appear to reflect broader changes in the economy as more Americans have shifted their spending online and stores close after decades of overexpansion.

But the government figures don’t tell the whole story. Government statisticians still haven’t caught up with the booming growth in e-commerce. In fact, jobs in areas like distribution warehouses where job growth is soaring are counted under the warehouse industry category, not retail. That method excludes 4 million retail jobs, or 20% of the retail industry, estimates Mark Mathews, vice president of research development and industry analysis at the National Retail Federation, the nation’s largest retail trade group.

Retailers are also still struggling to find qualified workers. There were 840,000 openings for retail jobs at physical stores in February, more than double the number from February 2013, according to the most recent government figures.

“People have extra money,” said Andy Challenger, vice president at Challenger Gray & Christmas, a Chicago-based global outplacement firm. “But the jobs in retail are really shifting away from the front of the store to the back like warehousing jobs.”

Here are the top factors affecting retail job losses:

SHIFT AWAY FROM PHYSICAL STORES

Increasingly, shoppers are spending more of their purchases online. That’s causing stores that haven’t been keeping up with shoppers’ shifting habits to either shrink their physical stores or shutter poor-performing ones.

In February, Payless ShoeSource announced it was closing all of its 2,100 U.S. stores, making it one of the biggest store liquidations. Also accounting for a big chunk of store closures this year is children’s retailer Gymboree, which is closing its remaining 750 stores.

As of last month, store closures this year have exceeded the total recorded for the full year 2018, says Coresight Research, a key global research and advisory firm. U.S. retailers have announced 6,150 store closures, and 2,671 store openings. That compares to 5,864 closures and 3,239 openings for the full year 2018.

RISE OF THE ROBOTS

Retailers, including Walmart and Target, are increasingly automating menial tasks for workers. Under pressure from Amazon, they are turning their physical stores into shipping hubs, speeding up deliveries and helping to defray costs.

“Retailers are moving into things like artificial intelligence to boost productivity, and that’s creeping into stores and limiting job growth,” said Ken Perkins, president of RetailMetrics LLC, a research firm.

Walmart, for instance, is rolling out robots to a cluster of stores that help keep tabs of what’s on and off the shelves and communicating that information to the automatic conveyor system that is backed up to truck bays. It is also testing computer vision to help manage the store.

Workers at a number of retailers are using new apps on their hand-held devices to manage routine tasks like price changes on the spot.

EXPERIENCES INSTEAD OF CLOTHES

Shoppers are continuing to focus more on experiences like spas and away from clothing. Aging boomers are also less interested in buying clothing as much as they used to.

NPD Group, a market research group, estimates that as much as 40 percent of shoppers bought experiences as gifts during the last holiday season, up from 25% just a few years ago.

When shoppers do buy clothing, they tend to go online or increasingly focus on discount stores like T.J. Maxx. Department stores have cut 23,200 jobs in the past 12 months, according to the government data. Clothiers have let go of 23,300 workers during that same time period.

GOVERNMENT LAGS BEHIND ECOMMERCE

If you work for a retailer but don’t work in a building where the retailing of goods is the principal activity, you don’t count as a retail employee.

That’s because the Bureau of Labor Statistics determines the number of workers based on the main function of that site, says Mathews of the National Retail Federation. That misses the growth of hiring of workers at call centers, fulfillment centers and shipping sites. In fact, workers in the transportation and warehousing sector rose 11,100 in April and 176,200 in the past 12 months, according to the latest government data.

“We are working to get around this,” Mathews said.

___

AP Economics Writer Josh Boak in Washington contributed to this report.

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Are Retail Jobs In A Funk? It’s Complicated