People enter a Forever 21 store at a shopping mall in Montebello, California on September 30, 2019 a day after the fashion retailer filed for Chapter 11 bankruptcy protection.
Frederic J. Brown | AFP | Getty Images
Even as unemployment in the U.S. has fallen to a new 50-year low, jobs continue to evaporate in retail.
The U.S. government reported on Friday that the unemployment rate has fallen to 3.5%, a new 50-year low. But over the last month, as the U.S. has added 40,000 jobs in education and health services and 30,000 in professional and business services, its axed 11,400 jobs in retail.
Since reaching a peak in January 2017, the retail industry has lost 197,000 jobs.
Retail continues to be under pressure as shoppers head online and increasingly demand products that cater to their specific tastes. Amid these challenges, bankruptcies and store closures continue to rattle the industry, as retailers try to whittle away expensive leases that now weigh more heavily on stalling sales.
In September, fashion retailer Forever 21 filed for bankruptcy and announced plans to shutter up to 180 stores. That month, the parent of Sears and Kmart disclosed it is laying off 250 employees as it plans to close upward of 80 stores. In August, Barneys filed for bankruptcy.
For certain better-capitalized companies, some of these layoffs and store closures come amid investment in e-commerce and automation. Walmart, for example, is testing new employee structure within its stores in an attempt to cut the size of its store management staff, as it plans to roll out ‘unlimited’ grocery delivery service nationwide.
That could mean employment is shifting, rather than simply withering, argue some retail executives, as well as the industry’s trade group.
According to the National Retail Federation, employees who work for a retailer but in roles like e-commerce and warehouse distribution are not included in the bureau’s statistics. As a result, its numbers lack full insight.
“From the marketers who send an ad, to the IT people who design the e-commerce interface, all the way through to the warehouse employees who fulfill the order, [The Bureau of Labor Statstics] data does not paint an accurate picture of the modern, multichannel retail industry — or its employment,” wrote Mark Mathews, vice president of research development and industry analysis for the NRF in a blog post earlier this year.
Sam’s Club CEO John Furner described some of the shifting roles in retail in an interview with CNBC at an industry conference, Groceryshop, last month The Walmart-owned club chain led a turnaround over the past few years that has included layoffs, store closures and investments in e-commerce.
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“Two-thirds to three-fourths of associates the company asks to move to another role do, we ask to move another job, they do,” he said, calling out as example a personnel manager who had moved into the club pickup team.
“We know that in the retail environment − and I’ll speak to Sam’s Club specifically − there are a few jobs that really matter in the club,” said Furner. “If our fresh food business is running well −typically the whole box is going to be in great shape.”