Has retail permanently downsized?
The number of people filing for first-time unemployment claims reached 1.416 million last week, an increase of 109,000 over the previous week, according to statistics released by the Department of Labor. How many of those worked in retail is not known, but there’s no doubt that the novel coronavirus pandemic has taken a heavy toll on the industry with little guarantee that many or even most of the jobs lost to date will ever come back.
The number of retail workers laid off or furloughed has left 1.9 million store associates looking for other ways to pay the bills. CNBC reports that 1.1 million of those currently unemployed are considered temporary, but when or if they will be brought back on the job remains to be seen.
The article points to the growing list of retailing chains that have filed for bankruptcy and announced store closings even as reports of others on the Chapter 11 brink continue to pop up. Headquarters and regional office positions have not been safe either, as evidenced by Macy’s recent announcement that it was cutting 3,900 corporate jobs.
Even in good news retail cases, the numbers show that the industry is far from its pre-pandemic employment levels. Best Buy, which preliminarily reported that its second quarter sales rose 2.5 percent overall (two percent in the U.S.) and that online sales were up 255 percent, has brought back roughly half the 51,000 employees, mostly part-timers, that it furloughed when it had to close stores to customers earlier this year.
Some retailers, for sure, have added jobs. Grocery chains and others deemed essential have had to staff up in the face of increased consumer demand for everyday staples and other products they sell.
Others moved workers, new and existing, into fulfillment and related positions as online sales shot up earlier in the pandemic. Consumers who turned to ordering more online have stuck to those routines either out of satisfaction with the new way of buying goods or to avoid contracting COVID-19 in states where the virus is spiking to record levels.
In an acceleration of moves being made prior to the outbreak, retailers are turning to increased automation and robotics in stores and warehouses. While advocates point to new jobs being created by this development, they do not typically account for the impact on hourly workers that are, for the most part, not qualified at present to move into technical positions.
- Unemployment Insurance Weekly Claims – Department of Labor
- Retail workforce could face permanent decline as companies take blow from pandemic, lockdowns – CNBC
- Struggling retailers lay off workers and pay millions in executive bonuses – RetailWire
- Best Buy connects strong sales to frontline worker performance – RetailWire
- Where can robots assist in retail’s COVID-19 efforts? – RetailWire
DISCUSSION QUESTIONS: Do you see retail industry employment returning to pre-pandemic levels any time soon? Will this experience make it more difficult for retailers to recruit workers interested in building a career in the years ahead?