It’s never been easy to work in retail, but 2016 has been a particularly tough time for retail workers since the only thing tougher than working in retail, is to suddenly find oneself not working in retail.
According to Challenger, Gray & Christmas, a job placement firm with an unexpectedly jolly name, more than 43,600 layoffs have been announced in the retail sector so far this year.
That doesn’t make retail the leader in layoffs (that honor goes to energy due to the huge drop in the price of oil over the last two years), nor does it get the No. 2 spot since computers still remain ahead powered by big cuts at Microsoft, IBM and Intel.
But retail is having a tough year as factors such as how people shop, where they shop and what they buy are changing fast.
“The traditional retail industry in some respects is facing Armageddon. There were far too many stores built,” said Mark Cohen, professor and director of retail studies at Columbia Business School.
Amazon and Alibaba get a lot of the international credit for this — and rightfully so since online sales have obviously been in overdrive in the last few years — but the maelstrom of headwinds facing physical retail right now are more than just eCommerce competition. Discounters like the TJX chain, Ross Stores and the various dollar store types are doing well, as is the low-price guaranteeing Walmart.
Bargain-hunting consumers force retail pricing into a race for the bottom, which has proven suicidal for some retailers that simply lost the ability to sell anything at full price — and thus lost the ability to make money.
However, as grim as the news sounds, it is worth noting that for the tens of thousands of retail jobs cut through the wave of store closures, the government’s figures indicated that the retail sector as a whole added nearly 200,000 jobs this year.
The broader category catches not only struggling department and box stores – but also auto dealers, home improvement chains, supermarkets and “non-store retailers” — a subsector that includes Amazon and other eCommerce players. Many of those are growing — and fast — particularly if one looks at backend logistics.
“The retail business is not dead, but some legacy retailers are dying,” Columbia’s Cohen said.