While the holiday shopping sales were strong, it was a different matter altogether for frontline retail workers. According to a report from Challenger, Gray & Christmas, retail hiring in December was the lowest for the month on record.
December tends to be the month that retailers hire seasonal employees, but that wasn’t the case in December 2017. Retail employment cratered 88% on a month-over-month basis from 462,700 in November to just 53,900 in December–the lowest December total on record. During the recession in 2008, retailers hired 72,700.
On a year-over-year basis, November 2017’s job gains of 462,700 was 29% higher than the 359,000 added in November 2016. December’s 2017 total was almost 60% lower than the 132,200 retail jobs added in December 2016.
“As retailers find the balance between online and in-store experiences for consumers, the restructuring in this industry will likely include more job cuts and slow hiring,” said John Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.
Where did some of the jobs go? Automation. Wal-Mart Stores Inc (NYSE:WMT) implemented its “Scan & Go” system in 100 of its stores. Grocery giant Kroger Co (NYSE:KR) is implementing its eerily similar sounding “Scan, Bag, Go” app at 400 of its stores. This allows customers to scan bar codes as they shop and pay when they leave.
According to Challenger, over 9,000 physical stores were shuttered in 2017 and retailers announced 76,085 job cuts. In 2018, it has been estimated that a record 12,000 physical stores will close.
A large number of retailers are expected to file for bankruptcy or announce store closures at the beginning of the year when they’re flush with cash. Walgreens (NASDAQ:WBA), Gap (NYSE:GPS), and Gymboree have already announced plans to close more than 3,600 locations in 2018.
Those companies most likely to file for bankruptcy include: Sears Holdings Corp (NYSE:SHLD), Bon-Ton Stores Inc (OTCMKTS:BONT), bebe stores, inc (OTCMKTS:BEBE), Destination Maternity Corp (NASDAQ:DEST), and Stein Mart, Inc. (NASDAQ:SMRT).
Not only will this lead to thousands of layoffs, it will also push many American malls, which are already in a death spiral, closer to the brink of death.
“Holiday Hiring Update: December Retail Hiring Down Nearly 90 Percent, Lowest On Record,” Challenger, Gray & Christmas, Inc., January 11, 2018.