Dive Brief:
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The retail sector collectively cut 30,000 jobs in March, the U.S. Bureau of Labor Statistics reports. Employment in general merchandise stores declined by 35,000 in the month and has fallen by 89,000 since a recent high in October 2016,
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The February and March retail jobs losses were the worst two-month decline since 2009, according to Bloomberg.
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Average hourly earnings for all employees on private nonfarm payrolls rose in the month by 5 cents to $26.14, following a 7-cent increase in February. Average hourly earnings of private-sector production and non-supervisory employees increased by 4 cents to $21.90. Over the year, average hourly earnings have risen by 68 cents, or 2.7%.
Dive Insight:
Between retail bankruptcies and non-bankruptcy stores closures in recent months, retail has lost more jobs in two months than the coal mining industry has lost in the past 20 years, noted Nobel prize-winning economist Paul Krugman in a tweet on Sunday. While President Donald Trump has made bringing back coal jobs a signature part of the rhetoric of his campaign and his presidency, he’s made no mention of retail jobs.
And it's unlikely they'll be coming back any time soon. In fact, this could be the beginning of what many analysts have anticipated will be an inevitable correction. Last year, retail analyst Jan Kniffen noted that a third of malls will close in coming years as over-expanded retailers shutter some doors and e-commerce takes market share.
American Apparel, The Limited, Wet Seal, HHGregg, BCBG Max Azria and others have all closed all or most of their stores in the bankruptcy process, while Sears, Kmart, Macy’s, Staples, Office Depot, Ralph Lauren and others have closed stores as part of ongoing turnaround efforts outside Chapter 11. Earlier this year, a report from commercial real estate research firm CoStar Group found that retailers need to rationalize nearly 1 billion square feet of U.S. store space by closing stores, converting retail space for other uses or reducing rents.
But not all retailers are shrinking their physical footprint. Dollar stores and off-price retail company TJX Cos. are expanding their fleets. Dollar General plans to open 1,000 new stores this year. And pure-play upstarts like Warby Parker, Bonobos and Casper Mattress — not to mention Amazon — have turned to brick and mortar to increase sales.
Shoppers — including the up-and-coming Generaton Z — prefer the see and touch opportunities of physical retail, research has shown. E-commerce remains an inefficient and expensive way to conduct a retail business, and physical stores can boost a retailer’s online sales, according to Moody’s. Still, retail stores that are poorly located, maintained and operated are likely to see the chopping block, according to Retail Dive’s Consumer Survey.