The retail sector has experienced little growth in employment over the past year, with retailers showing reluctance to hire amidst economic uncertainty. In February, the Bureau of Labor Statistics (BLS) reported a modest decline of 6,000 jobs in the industry, partly due to labor strikes in the food and beverage sector. This decrease marked a significant shift from the previous month.
According to economist Allison Shrivastava from job listings site Indeed, retail job postings and hires have been gradually declining, suggesting a slow but continuous trend. While there was a net gain of 29,500 hires in January, particularly in the “general merchandise” category, overall retail employment levels have remained relatively stagnant over the past year.
Factors such as e-commerce, automation, and the adoption of self-checkout systems have influenced this trend, as noted by ZipRecruiter chief economist Julia Pollak. Despite some hiring announcements bouncing back in recent years, the industry still faces challenges, with hiring levels in 2024 remaining significantly lower than in 2019.
Amidst a rise in part-time employment for those seeking full-time jobs across all industries, the retail sector has seen an increase in multiple jobholders, indicating a shifting labor landscape. While some retailers are still hiring, especially in certain sectors like warehouse clubs and general merchandise stores, overall hiring gains have been lower compared to the previous year.
Analysts are forecasting a challenging road ahead for retailers, with concerns around consumer sentiment, trade policies, and geopolitical uncertainties impacting the industry’s outlook. Sales have declined, and many consumers are cutting back on spending, leading to a cautious approach from retailers who are bracing for potential turbulence.
Reports suggest that retailers are streamlining operations, with a significant number of job cuts announced this year, surpassing figures from the same period last year. Store closures have also contributed to these job cuts, as seen in the case of fabrics chain Joann.
Overall, the retail industry is facing a period of transition and uncertainty, with companies adjusting their strategies in response to evolving market conditions.
Last month, a retail chain announced the closure of all its approximately 800 locations due to the lack of a buyer. The company, which employed around 19,000 people mainly in part-time roles, made this decision following store closures across the industry hitting record levels in the wake of the pandemic. A forecast by Coresight Research projects an additional 15,000 closures by 2025, with Party City, Big Lots, Walgreens, 7-Eleven, and Macy’s leading the way in store shutdown plans.
In response to these challenges, Walgreens recently finalized a deal to go private after facing a tough post-pandemic period and planning to close 1,200 stores. Analysts anticipate more retailers will follow suit, either through store closures or slowing down new openings to save costs amidst rising expenses, labor shortages, and economic uncertainties.
A report by JLL revealed that recent announcements of retail closures have outnumbered openings, with various categories such as apparel, drugstores, home furnishing, and department stores experiencing more closures than openings. However, some retailers have managed to thrive, like Walmart attracting wealthier shoppers seeking affordable prices, and Macy’s witnessing positive results from its turnaround strategy, including store closures. Gap’s shares also surged after exceeding holiday season expectations.
Despite these success stories, industry experts warn that many retailers are ill-equipped to face new challenges, with ongoing struggles in adapting to the shift towards e-commerce, inflation-driven cost increases, and reduced consumer spending due to high interest rates. The uncertain policy environment further compounds these challenges, affecting both large and small retailers in the industry.
