Skip to main content

Employment Stalls at Apparel Retailers

U.S. employment is growing, but not in the apparel retail sector, according to data just released by the Bureau of Labor Statistics.

U.S. employers added 192,000 jobs in March, a few thousand short of what many had hoped for, but evidence that the economy continues to claw its way out of the Great Recession at a slow and deliberate pace. However, only 21,000, or 11% of the new jobs, were in the retail sector. Growth in retail employment, which had been outpacing total job growth in 2012 and 2013, has  slowed drastically: Since the beginning of this year, the retail sector has suffered a net loss of 2,000 jobs, while the overall increase in employment has been over 530,000. On a 12-month smoothed basis, retail employment grew by 1.7%, virtually even with overall employment growth, but well below levels seen late last year.


The new retail jobs were at general merchandise, auto and restaurant merchants, not apparel-based stores. Department stores suffered a net job loss of 1,000 in March. Sears, J.C. Penney, Target and Macy’s have all begun to aggressively close underperforming stores. In April, Sears will shutter its downtown Chicago flagship store, and Macy’s announced that although it is eliminating jobs at the five stores slated to close, it is opening eight new stores elsewhere, and expects to maintain its level of 175,000 employees this fiscal year. Other department stores, however, are cutting overall headcount.

Specialty apparel added 1,000 jobs in March, but remains 7,000 below the January level. The 12-month smoothed employment growth rates at both the department and specialty store sectors were essentially flat in March.


The trend of lower hiring levels at retail is expected to continue. Retailers are shifting investment away from people toward technology. New systems to improve efficiency, inventory control and visibility, and customer service are being partially financed by decreases in headcount. Increases in minimum wages and health care costs are accelerating this trend. Large chains are realizing that their online sales are growing much faster than sales at bricks-and-mortar stores, particularly as consumers increasingly use mobile devices to shop, retailers and are rapidly evolving their businesses to an omnichannel model that integrates physical and digital retailing. This boils down to a need for more technology and fewer people.