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Retail Job Growth Moves to the Warehouse

The new retail job is less in store and more behind the scenes in the warehouse.

Employers in the U.S. added 390,000 jobs in May, according to Labor Department data. Though the retail sector cut 61,000 jobs, employment is still 159,000 jobs higher than where it was in February 2020. However, apparel and accessories retailers shed 9,000 positions in May as transportation and warehousing expanded by 47,000 jobs with employment rising by 18,000 in warehousing alone. The June jobs report is due out Friday.

Daniel Dorman, economist in the office of employment and unemployment statistics, U.S. Bureau of Labor Statistics, expects U.S. retail trade jobs to shrink by “nearly 587,000 jobs from 2020 to 2030,” he wrote in an April blog. Department stores and general merchandise stores could see the greatest loss of jobs, or about 233,500 positions representing a 7.7 percent decline, Dorman added. Moreover, the retail sector is expected to make up just 8.6 percent of total employment in 2030, a steady decline from 9.7 percent in 2020 and 10.2 percent in 2010.

“Retailers are expected to make further investments in automation, resulting in faster productivity growth over the 2020 to 2030 decade. As a result, fewer workers will be required to meet the projected growth in output,” Dorfman said.

The warehousing and storage industry seems to be gaining from retail’s loss. It expanded 86.1 percent between 2010 and 2019, while the retail sector grew just 8.1 percent over the same period. The contraction in employment among general merchandise stores— including department stores—and apparel and accessories doors accounted for the largest shares of employment declines in retail, at 29 percent each between 2017 and 2019. Most of the store closures stemmed from competition with online websites and changing consumer preferences to food services, travel and used and discount merchandise, the economist said. And from 2019 to 2020, the contraction in apparel and accessories stores accounted for 38.6 percent of the total jobs lost in the retail sector.

Hiring in the warehouse sector is already on the rise. Supply chain disruptions have upended retailers’ inventory levels. Many retailers need not just somewhere to store it all, but also logistics to help them keep track of where their stuff are stored. And since retailers are hiring for in-house positions, that also means they don’t need third-party services as much as they used to.

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Dollar General in June held job fairs at four different locations for its distribution centers (DC). It’s also holding job fairs at five other locations to hire for its in-house fleet-driver network.

Dollar General previously held similar job fairs last September to add to the 50,000 employees hired since in July 2021. The dollar store isn’t the only one that has been hiring for logistics and supply chain roles. Walmart last September said it was hiring 20,000 workers across its supply chain for DCs, fulfillment centers and transportation offices.

Mounting job losses in retail aren’t just a problem in the over-stored U.S., which this month saw StockX lay off 8 percent of its workforce and Stitch Fix shed 15 percent of salaried staff. Across the pond, U.K. retail employment has also been on the decline, in large part due to the growth of online shopping. Last year saw British e-tailer Boohoo Group open a fourth warehouse, adding 500 jobs to start.

The Centre for Retail Research (CRR), a retail research firm tracking data in the U.K., Europe and North America, said the growth in online retailing was faster in the U.K. than any other country, with the online share of retail at 6.6 percent in 2006, 12.7 percent in 2013 and 19.2 percent in 2019.

U.K. retail job losses thus far in 2022 through the end of May totaled 18,271, based on 1,101 store closures, CRR said. But the data also shows 645,204 U.K. retail jobs lost since 2017. Job losses have been higher in past years, due to store closures leading up to and during the pandemic. CRR data indicates a total of 72,580 retail doors have closed thus far in the U.K.