There is another side to the retail apocalypse that is not being talked about but should be: the retail jobs apocalypse. Hundreds of thousands of retail jobs are vanishing before our eyes.
The apocalypse has two causes; first hundreds of stores are closing. Sears Holdings (NYSE: SHLD) is planning to shut down 60 Kmart stores this months in addition to the 84 it closed over the summer. Sports Authority which operated 450 stores declared bankruptcy and shut down completely earlier this year.
Department store operator Macy’s (NYSE: M) is in the process of shutting down 100 stores. There is also speculation that Walgreens (NASDAQ: WBA) will be forced to close up to 500 stores if its acquisition of Rite AID (NYSE: RAD) is approved by the Federal Trade Commission.
That’s just the tip of the iceberg at least 14 major chains are planning close more than 100 stores each, Clark Howard writer Charis Rebecca Brown reported back in September.
If all that wasn’t bad enough there’s speculation that Sears Holdings (NASDAQ: SHLD) which operates around 1,600 stores might collapse completely next year. Sears alone employees around 178,000 people which should give you a hint of the potential catastrophe the country is facing.
Job-Killing Tech Invades Retail
The second cause of the retail jobs apocalypse is technological. Walmart (NYSE: WMT) is in the process of eliminating 7,000 back office clerical jobs in its stores.
Those eliminated are clerks whose task was to count cash and process invoices. The cash is now being counted by cash-recycling machines and the invoices are being processed by computer algorithms at Walmart HQ in Bentonville, Arkansas.
Worse might be yet to come Amazon (NYSE: AMZN) is testing a grocery store with no clerks or cash register. Amazon Go uses “Just Walk Out” technology that lets customers pay with an app, and take purchases without going near a register. The first public test is scheduled for next year, but Amazon employees are doing beta testing right now.
Nor is it just Amazon, Walmart has opened two Pickup and Fuel locations where customers can pickup groceries ordered online at a convenience store. That too eliminates clerks and cash registers. Although it does create a few jobs pulling and packing orders at a supercenter. This will enable Walmart to kill jobs because one or two pickers and one convenience store cashier will be able to take the place of several clerks or stockers.
Another job-killing technology is Walmart Pay the retailer’s payment app which has been rolled out at 4,600 US stores. The use of Walmart Pay would enable the retail giant to set up Amazon Go type technology in its stores fairly quickly. Critics of Amazon should note that Walmart is actually further along in rolling out job-killing tech than the Everything Store.
To be fair Walmart is testing technology that might create some jobs. An example of this is the use of Uber and Lyft to deliver merchandise from its stores.
Retail is no Longer Creating Jobs
Disturbingly many of the unemployed retail workers will have a hard time finding new work.
The number of new retail jobs created in October 2016 was 23% lower than in October, 2016, outplacement firm Challenger, Gray & Christmas estimated. Retail job gains in October and November of 2015 were 14% lower than in the same months in 2015.
This means retail is no longer the job creation machine it once was. The retail apocalypse is beginning to damage the larger economy. Our political leaders are going to have to deal with this crisis if they don’t want join all those unemployed cashiers on the unemployment lines.