The news is full of doom and gloom for retailers, driven by some high profile bankruptcies and store closings by national chains such as Sports Authority, Sears, Payless Shoes, J.C. Penny, Macy’s and others. Explanations for the difficulties faced by brick and mortar retail focus on the rise of online shopping (most notably Amazon) and the decline of suburban shopping malls.
But is brick and mortar retail dying? As gauged by employment, hardly. As shown in the chart below, retail employment is following the same trend as total nonfarm payroll employment, and both have been growing steadily after bottoming out in 2009.
When looking at retail employment as a percentage of nonfarm payroll employment, we can see that it has declined from 12% in 1990 to 10.9% as of 2016. More importantly, the rate of decline has been fairly constant over that entire sixteen year period, and has not accelerated with the rise of ecommerce or millennials’ preference for the urban core over suburbs.
We are seeing a decline in employment in two specific retail subsectors: general merchandise stores (which include department stores) and clothing stores. The below chart shows the annual change for total nonfarm employment, retail excluding general merchandise and clothing, general merchandise stores, and clothing stores. The datapoints for March 2017 show the percentage change from March 2016.
As of March 2017 (the most recent figures available from the BLS), total nonfarm employment is up 1.5% from a year earlier, with retail excluding general merchandise and clothing up 1.0%, general merchandise stores down 1.6%, and clothing stores down 0.5%. Total retail employment including general merchandise and clothing stores (not shown in the above chart) is up 0.4% from a year earlier.
In short, while general merchandise stores and clothing stores are having a rough year so far, overall retail employment continues to grow with the rest of the economy.