Retail job cuts are on the rise, according to employment firm Challenger, Gray and Christmas.
So far this year, the retail sector has cut 31,832 workers from payrolls, a whopping 41 percent increase over the 22,502 jobs lost a year earlier.
The retail reduction still lags job losses in the energy sector — but those losses were expected, the retail job contraction was not.
“We did see an uptick,” said Andrew Challenger. “The fact that we’re seeing cuts so large and outside of energy is a little but concerning.”
Part of the explanation for the big increase is the bankruptcy of Sports Authority Inc. Challenger, though, pointed out that the weak holiday selling season caused many retailers to cut back.
Plus, the change in consumer shopping habits to more online purchases has pushed retailers to close stores and layoff employees.
“Brick-and-mortar stores like Macy’s, Nordstrom’s and Wal-Mart are all showing the shift in resources,” said Challenger. There are more online retail jobs being added, but they aren’t enough to offset the store positions getting cut. Challenger reported that the apparel sector has not laid out any hiring plans as of March, while the retail industry said it would add 5,200 new employees.
He also added that increasing employee costs were also another piece of the layoffs.
“With unemployment this low, we’re seeing wages rise,” Challenger said. “We’re seeing it across all industries.”
Challenger said this trend will not reverse. “A large chunk of spending is coming from Millennials and that is a group that is absolutely comfortable shopping online,” he said.
On a positive note, he said overall hiring has been solid across the country, just not so much in the retail side.