Retailers are among the top five U.S. industries slashing jobs this summer.
The news for retailers could be a lot better this summer, as retailers are among the top five U.S. industries slashing jobs this summer and also reporting stagnating sales growth as they enter their crucial back-to-school shopping season. According to outplacement firm Challenger, Gray and Christmas, 43,618 retail jobs were cut between January and July, down from 47,762 in the same period in 2015, with layoffs accelerating across industries over the past three months. A total of 30,157 jobs were lost in May; 37,536 in June, and 43,618 lost in July.
The five sectors reporting the largest job losses are retail, energy, computer, industrial goods, and financial, each of which are facing major upheavals. Retail is facing a number of challenges, including the rise of e-commerce, delivery and fulfillment issues, changing consumer demands, and changes in consumer priorities.
“The traditional retail industry in some respects is facing Armageddon,” Mark Cohen, professor and director of retail studies at Columbia Business School told CNN Money. “There were far too many stores built.” The biggest challenge facing retail is the shift in how and where consumers are shopping. "The retail business is not dead, but some legacy retailers are dying," Columbia's Cohen said.
Meanwhile, the U.S. Census Bureau’s monthly advance retail sales report found that U.S. retail sales for July measured $457.73 billion, stagnating from June figures but representing an 1.9 percent increase over July 2015 numbers. The data reflects the changes in consumer behaviors, finding that when Americans are making purchases, they are saving their money to buy cars, and they are also making many of their purchases online rather than in physical stores.
The disappointing pause in retail sales does throw up some red flags for the remainder of the year. “It is a bit disappointing, at least to start the quarter,” Kevin Cummins, an economist at RBS Securities Inc., told Bloomberg. “Labor income is the key. Confidence seems to be moving sideways.”
