More than 41,000 people have lost their jobs in the retail industry so far this year — a 92 percent spike in layoffs since the same time last year, according to a new report.
And the layoffs continue to mount, with JCPenney announcing this week it would be closing 18 stores in addition to three previously announced closures, as part of a “standard annual review.”
Retail job cuts for January and February total 41,201, said research firm Challenger, Gray & Christmas in a new survey, including nationwide retailers such as Payless and Charlotte Russe.
“This is significant, and marks an acceleration of store closures and job cuts in the near term," said Mark Hamrick, a senior economic analyst at Bankrate. “Retail is ground zero for seeing the shifts of change in our lives.”
Lifeway Christian Bookstores announced last week it would be closing the doors of all 170 brick and mortar stores, in a pivot to focusing on digital and e-commerce.
“The decision to close our local stores is a difficult one,” said Lifeway Chief Executive Officer Brad Waggoner. “While we had hoped to keep some stores open, current market projections show this is no longer a viable option.”
“In the post-digital era, only the strong will survive,” Ron Johnson, CEO of Enjoy, a retail technology company, told NBC News. “You need a great brand, a strong balance sheet, and a vision for experience that commences digitally. Darwin would love this.”
Johnson previously worked as head of retail for Apple and opened the first Apple Store and scaled it out to 1,200 locations. He then went on to serve as the CEO of JCPenney, but has no connection to this week’s store closure notice.
That’s the formula being followed by some retailers who are winning in the sector. This week, Lululemon rallied to an all-time high after a strong holiday earnings report. Walmart also announced a strong holiday with e-commerce growth of 43 percent.
However, increased competition from e-commerce giants like Amazon continue to cause ripple effects for traditional brick and mortar retailers.
“There’s no doubt that the retail industry is undergoing a rapid transformation due to shifting consumer preferences and new technologies," said Matthew Shay, president of the National Retail Federation. "Successful retailers view this transformation as an opportunity to reinvent the shopping experience for customers who are embracing both e-commerce and in-store, not one or the other.”
President Donald Trump has been an outspoken critic of the effects that retailers — and Amazon in particular — have had on small communities, tweeting last April that “States and Cities throughout our Country are being cheated and treated so badly by online retailers. Very unfair to traditional tax paying stores!”
In addition to the threat from e-commerce, brick-and-mortar retailers are also staring down a shift in consumer preferences.
“Consumers aren’t ceasing consumption, they are changing what they are consuming,” said Bankrate’s Harmrick. "Those dollars are finding a fair amount of competition with services like what Apple released this week,” he said, referring to the tech giant's launch of a news subscription and streaming video service.
