Post Classifieds

Reports of the death of U.S. retail are premature

By Neil Dutta
On April 13, 2018

Source: Pixabay

There is a widely held belief that the rise of e-commerce has led to widespread job losses in the retail industry. However, employment in the trade has been declining as a share of private sector employment since the mid-1980s. 

At 12.7 percent, retail’s share is at its lowest point since the 1970s. Long before consumers started buying goods online, they were already shifting away from retailers.

Today’s market focus, nonstore retail employment, a proxy for e-commerce, has admittedly been surging since 2010. 

However, retail employment outside of nonstore retailers was advancing at a fairly respectable pace until early 2017. 

From 2010 to 2016, it grew just over one percentage point a year, broadly in line with the growth in recent cycles. Last year, retail employment excluding non-store retailers declined by just 0.3 percent.

Of course, some retail industries are not especially vulnerable to Internet competition, at least for now. 

For example, since 2010, motor vehicle and parts dealers, gasoline stations, building-material and garden-supply stores, and food and beverage stores have been large drivers for retail employment. 

However, it is not immediately clear these subindustries are in direct competition with Internet retailing. Thus, it seems there has been continued job gains in the retail industry since 2010 with some shifting of employment between subindustries along the way.

After a modest improvement after the end of the recession, department store employment has been falling steadily since 2012.

The Bureau of Labor Statistics places department stores under the umbrella of General Merchandise Stores, which are establishments that sell a wide variety of goods from a single location. Warehouse clubs and supercenters also do this, and employment growth in this category has been on the rise.

Since 2010, commercial construction of “merchandise shopping” has climbed at a mediocre 4 percent annualized pace. 

By contrast, real construction of warehouses, which benefits from online retailing, has surged 15.8 percent. 

Like employment, this is an example where changing dynamics in the retail industry have produced a shift from one subsector to another, not an erosion of total activity.

Heading to a warehouse to buy staple household goods in bulk is fine, but Americans may want something more when going to a traditional department store.

So take the ominous reports of retail’s demise with a grain of salt. 

Yes, e-commerce has displaced many retail jobs, causing some very visible damage, such as empty malls. But other retail categories appear to have picked up the slack. 

Although this macro analysis could mask distributional and regional consequences, for now, let’s focus on the positive: Retail employment continues to rise, and the bad news is largely priced into the market.

Get Top Stories Delivered Weekly

More kirkwoodstudentmedia News Articles

Recent kirkwoodstudentmedia News Articles

Discuss This Article

MOST POPULAR KIRKWOODSTUDENTMEDIA

GET TOP STORIES DELIVERED WEEKLY

FOLLOW OUR NEWSPAPER

Kirkwood students often admire Lasik Omaha doctors that are carving new paths in the field of eye care and transforming the way routine eye procedures are done.

Log In

or Create an account

Employers & Housing Providers

Employers can list job opportunities for students

Post a Job

Housing Providers can list available housing

Post Housing

Log In

Forgot your password?

Your new password has been sent to your email!

Logout Successful!

Please Select Your College/University:

You just missed it! This listing has been filled.

Post your own housing listing on Uloop and have students reach out to you!

Upload An Image

Please select an image to upload
Note: must be in .png, .gif or .jpg format
OR
Provide URL where image can be downloaded
Note: must be in .png, .gif or .jpg format