The seasonally adjusted figure showed that the number of people employed in the retail sector fell by 20,000 in November.
David Zalubowski / Associated Press
- The number of workers continues to decline while consumers spend more than ever.
- These shifts to retail show how business is adapting: fewer workers are employed.
The shelves are slated to be filled this Christmas time, but companies are using fewer people to store them.
The dates are as bright as day.
The latest job report from the Bureau of Labor Statistics showed that companies put about 330,000 retail employees on their payroll in November, but the agency always adjusts its data based on “seasonality” and actually calculated a loss of 20,000 retail positions for the holiday season. This means that retail employers hired far fewer people than in a “normal” November.
The start of Christmas shopping usually means a surge in new hires in stores, and the November shortfall seems to confirm a strange pattern that is consistent with labor shortages across the economy: consumers are buying more than ever and businesses are keeping up with demand they have fewer workers than before.
Sales still showed a healthy appetite for goods around Black Friday and Cyber Monday this year, given a record high of $ 566 billion in October.
Corporations are pulling in too, as recent data from the Commerce Department showed that corporate profit margin was at its highest level since 1950.
The situation is different when it comes to employment. Overall, the US created about 210,000 jobs last month, well below economists’ projections of over 570,000. The Department of Labor collects job data during the week that includes the 12th of every month, meaning the November report has seen a hiring frenzy in the past prior to Black Friday.
Certain types of businesses within the retail umbrella ended up hiring more workers than originally projected, but the sector as a whole posted losses. Merchandise stores lost about 20,000, clothing and accessories stores lost 18,000, and sporting goods, hobby, book, and music stores lost 9,000. Grocery stores saw an influx of about 9,000 workers nationwide, while hardware stores and garden centers added about 7,000 new employees. Overall, retail employment is 176,000 lower than last February.
Other examples show a changing pattern of spending. Large retailers like Target, Walmart, Kohl’s and Dick’s closed their stores for the second straight Thanksgiving and joined a bigger trend in the industry to distract shoppers from the traditional turkey-fueled retail craze.
And while some discounters saw a slight increase in visitor numbers in 2019, most of the major boxing brands had fewer visitors on Black Friday as they offered the same deals online. That makes store visits less rewarding for the customer, said Neil Saunders, an analyst with GlobalData Retail, to Mary Meisenzahl of Insider.
Ecommerce data shows that Christmas offers are less focused on Cyber Monday as businesses seek to offset traditional peaks and troughs in consumer spending.
“What we know as Cyber Week looks more like Cyber Month,” said Taylor Schreiner, director at Adobe Digital Insights, in a statement.
Another sign of how much spending is getting worse, shoppers bought a record number of Thanksgiving turkeys in October. This shows that seasonal offers are not only less pressed for time, but are also smaller than ever as companies cut discounts to increase their margins.
What that means for the economy of the future
Should these changes in retail persist – which seems increasingly likely – it will have several effects on the wider economy.
For one thing, the stop-and-go increases, which lead to a massive seasonal sell-off, would likely give way to a steadier flow of goods given the continued rise in demand for transport and warehousing.
In the financial services industry, the death of retail has been replaced with a variety of buy-it-later options that continue to allow people to buy what they want, when they want, instead of waiting for a special day.
All of this comes back to the labor supply. The traditional pattern of recruitment in the retail sector depended on a large pool of available labor willing to accept seasonal, low-wage jobs. Those days may well be over.
The bottom line is that retailers are making more money than ever and are finding ways to do it with fewer employees.
