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Store job losses deepen as more buyers migrate online

NEW YORK – Retailers are cutting jobs at the sharpest pace in more than seven years, the evidence of an apparently continuous shift away from employee-heavy stores such as Americans increasingly shop online.

A combined 60,600 retail job losses of the past two months have less to do with the health of the AMERICAN consumer spending than with changes in the buying behavior. In the age of Amazon, traditional stores, J. C. Penney, Macy’s, have accelerated store closures and experiment with the use of fewer employees to staff the remaining stores.

The industry is also battered by a series of bankruptcy filings, most recently from Payless ShoeSource. The company announced this week that it is closing nearly 400 stores, almost 10 percent of the fleet.

The job losses in the retail, unwanted as they are, are still a relatively minor load on the overall U.S. economy. But for Americans looking for a position in the labour market, the pullback represents a painful obstacle. The retail sector accounts for almost a third of first-time jobs in the United States, so a retrenchment of the industry of the employers can block the access to the labour market for many.

Shopping on the web has an extensive, retail jobs represented a declining share of the labour market. They now make up 10.9 percent of employment, compared with 11.6 percent in 2000, says Michael Niemira, the director of The Retail Economist, a research firm. And experts expect more store closings and job losses — in the coming months.

“It is mainly about the impact of online shopping and the way consumers are shopping differently than ever before,” Niemira said. “It is more difficult for the industry to consistently do well and to earn money.”

Take Fernando Ramirez, a 19-year-old restaurant server and the student, who was looking Friday to buy some sweaters at a Kohl’s in Tustin, California. Ramirez said he stops at a department store or at a shopping centre once or twice a week to see what is available. But the most of his purchasing is done on the web.

“It is mainly to browse and see what they have,” said Ramirez, who lives in Tustin, California. “I’ve got more of my purchasing online now.”

The two-month contraction in retail jobs — 30,900 lost in February and 29,700 in March — marked the biggest two-month decrease since December 2009, when the industry shed 62,200 jobs. That month loss had meant the end of a long term decline in the industry as a result of the Great Recession.

The retail industry losses for February and March were included in the Friday in the U.S. job report from the government. The report offered a typically mixed message: Rent in the United States declined to the weakest pace in almost a year, but the unemployment rate reached its lowest level in nearly a decade.

The employment report pointed to dire problems of many of the stores to fill shopping arcades and shopping malls. Department and general merchandise stores — a category that includes Macy’s and Wal-Mart — barn to 34 700 workers last month. Clothiers to let go of 5,800.

Retailers who are involved in expensive big ticket items such as furniture stores and car dealers are hardly added tasks.

Nor are the wages to keep pace. The average hourly wages for retail employees, including supervisors, has inched up just 1.1 percent over the past year, compared with 2.7 percent average increase for all AMERICAN workers.

The struggle of a lot of traditional retailers can be traced most of all Amazon and other online retailers. Amazon Prime membership program costs $99 per year, it is a juggernaut, with services such as streaming music and video that created strong loyalty. Analysts say that Amazon Prime members disproportionately buy more and spend more.

In the process, Amazon has reset the standards of his rival retailers. They now feel more pressure to reduce costs while expanding services and offerings for shoppers, free shipping non-stop discounting, which can have a negative impact on the margins.

It is not only that Amazon. An online retailer, Chewy.com sells a range of pet supplies than what is generally available in the physical stores, including high-end organic pet food. The rapidly growing company plans to add about 3,200 jobs this year, raising its head count to 6,900.

Although traditional retailers are expanding their own online presence, these actions require much less employees. The labour involved in the sale of an item online via a distribution centre may be 50 percent less than if it were sold in a shop, estimates Pete Madden, a director at Alixners, LLP, a consultancy.

Ken Perkins, president of Retail Metrics LLC, a research firm, says he expects that the profit in the first quarter of the 113 retailers he tracks down 6.8 percent. That would be the worst quarter of performance since 2013.

Shops are also more and more the adoption of technology reduces the need for employees, such as mall kiosks and iPads on which shoppers can buy online in a shop. And some traditional shops such as Macy’s are testing self-service in some of their shoe departments.

In the hospitality industry, executives have touted the benefits of automation for customers. Ordering kiosks, for example, can help speed up lines and improve order accuracy. But it is still early days, chains such as McDonald s and Panera have entered ordering screens in some stores. And a number of sit-down chains have introduced tabletop ordering tablets.

One of the hard realities of the new shopping era is clearly at the Richmond Centre of the City outside of Cleveland, where the number of employees working in the stores appeared to exceed the slim number of shoppers on a cold spring afternoon Friday. Two of the mall’s three anchors — Sears and Macy’s — have closed in the past year. The third, J. C. Penney, is slated to close in June.

Tiffany Fulton was cut by J. C. Penney for a new battery for a watch. She has no shop at the mall regularly, ” she said, and her shopping habits, especially for clothing, to involve, to go, “every blue moon” and then not shop again for six months or even a year.

She said that she goes to the mall every once in a while for some “retail therapy.”

“If I need to feel better, I could stop by,” Fulton said.

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AP Economics Writer Christopher S. Rugaber in Washington, AP Food Writer Candice Choi in New York, AP Writers Mark Gillispie in Cleveland and Amy Taxin in Tustin, California, contributed to this report.

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