July Labour Force Survey Preview: Retail Jobs Lag, but No Apocalypse
Payrolls at brick and mortar retailers up slightly over the past few years.
The spread of ecommerce and self-checkout kiosks have long been spectres hanging over jobs at traditional retail outlets. However, though these trends have probably slowed industry job growth, there are no signs yet of a retail apocalypse, at least for the sector as a whole.
Payrolls at traditional brick and mortar retailers — which exclude ecommerce, other nonstore retailers, and auto and gasoline stores — were nearly flat between 2013 and 2018 before ticking up early this year. In May 2019, employment at traditional retailers was up 3.3% from six years earlier. While this was far slower than the 10.9% job growth elsewhere in the economy, it was no apocalypse.
Underneath the steady retail number, conditions vary
Jobs in traditional retail might be holding up as a whole, but there have been noticeable pockets of weakness, offset by strength elsewhere.
Two areas of retail stand out as particularly weak when the first five months of 2019 are compared with the same period in 2013. Jobs at general merchandise stores — which include department stores and certain big-box retailers — fell 9%, while employment at electronics and appliance stores dropped a whopping 25%.
On the flip side, employment surged 21% at health and personal care stores, a category that includes drug stores and pharmacies; beauty supply stores; and health product stores, underscoring the growing importance of healthcare in the Canadian economy.
Jobs in the miscellaneous retail category were also up, with some of the increase probably reflecting cannabis stores springing up toward the end of last year. Meanwhile, certain other segments of brick and mortar retail — like sporting goods, hobby, book, and music stores — did surprisingly well despite competition from online platforms like Amazon.
In a few subsectors of traditional retail, payrolls have been more or less stable over this period, following the general industry pattern. Employment at food and beverage stores — which account for nearly a third of all brick and mortar retail jobs — was roughly flat between 2013 and 2018 before ticking up this year. Jobs at clothing and clothing accessories stores also didn’t change much, posting growth between 2013 and 2016, and easing slightly since.
An American canary in the coal mine?
Despite some high-profile closures, overall employment at brick and mortar retailers has been surprisingly stable in Canada. Still, it’s fair to wonder about the longer-term prospects of jobs in the industry.
Recent US trends suggest some decline could be coming in Canada. Ecommerce accounts for a larger share of retail sales in the US than in Canada, and that appears to have hit jobs south of the border. Payrolls at traditional US retailers are down 2% since their peak at the start of 2017, a rare development during an economic expansion. In contrast with Canada, jobs at American sporting goods, hobby, book, and music stores have dropped sharply in recent years.
As online sales continue to grow in Canada, it’s likely some of these employment trends, already evident at electronics and appliance stores, will spread. But that doesn’t mean the industry is set for an imminent wave of job losses. The retail sector is diverse and major subsectors like health and personal care stores, and food and beverage stores have followed their own trends. So what’s more likely to cause a retail jobs apocalypse? A recession.
We track job numbers at brick and mortar retail stores using Statistics Canada’s Survey of Employment, Payrolls, and Hours (SEPH) through May 2019. Our classification of traditional retail covers the retail industry as a whole, excluding payrolls at motor vehicle and parts dealers, gasoline stations, and nonstore retailers. While the Labour Force Survey is timelier than SEPH, the monthly figures are not broken down in sufficient detail to track brick and mortar retail.