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Retailers Scrambling To Adjust To Changing Consumer Habits
KELLY MCEVERS, HOST:
There's something happening in the retail industry. So far this year, nine U.S. chains have filed for bankruptcy, and over the last five months, 89,000 workers have lost their jobs. And the surprising thing is that this is going on at a time when the overall economy is doing pretty well. NPR's Yuki Noguchi begins our coverage.
YUKI NOGUCHI, BYLINE: Retailers typically reassess their businesses after the holiday shopping numbers come in and adjust by closing or reallocating resources. For some big national chains, this year, that process is turning out to be a bloodbath. The Limited stores, electronics store hhgregg and clothing chain BCBG all filed for bankruptcy. So far, 3,100 store locations have closed, more than all of last year combined. JCPenney said it would close another 138 stores this year, Sears and Kmart 150, Macy's 100. Mark Cohen was CEO of Sears Canada until 2004. He now directs retail studies at Columbia Business School.
MARK COHEN: I think the disruption is just unfolding. I think the number of store closings will continue at an accelerated pace right through this year into next year.
NOGUCHI: There are about 1,200 malls in the U.S., the highest ever according to the International Council of Shopping Centers. Cohen says there's simply too much real estate devoted to retail, and that must shrink. He says all but the best-performing malls which make up about a third of the existing ones will eventually have to close or find a new identity. And in fact, many are being redeveloped to include office space, apartments, gyms or smaller retail space.
MARK COHEN: It's not clear what we're going to look like on the other side when this is all over if it in fact is ever all over.
NOGUCHI: Matthew Shay is CEO of The National Retail Federation.
MATTHEW SHAY: The velocity of change is unlike anything we've ever seen, you know? Before, things happened over a generation. Now they're happening overnight.
NOGUCHI: He says it's not that people aren't shopping. Consumer spending is in fact up. But that growth is largely online, and online retail requires very different skills. In January, the Retail Federation and 30 retailers announced they would launch a retraining program called RISE Up, offering certification in classrooms and online.
SHAY: They'll be in operations. They'll be in warehousing. They'll be in store management. They'll be in digital.
NOGUCHI: The program hopes to enroll 5,000 people by year's end. Marshal Cohen - no relation to Professor Mark Cohen - is chief retail analyst for The NPD Group. He says the outlook for retail workers who lose their jobs is grim, and he's skeptical about industry's efforts to re-educate its workforce for the demands of the future.
MARSHAL COHEN: The retail business rarely retrains people to be able to move into another job within that organization.
NOGUCHI: Even as retail shrinks, real estate developers are looking to add more services such as restaurants, establishments that could in theory absorb some of retail's castoff workers. But are they? Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, says no.
STUART APPELBAUM: That has not been our experience. That's not what we've seen.
NOGUCHI: The retail jobs of the future might be in a distribution center. But Appelbaum says those jobs are typically far away from metropolitan areas where most stores are located, and those jobs require different types of skills than, say, a cashier.
APPELBAUM: There is a lot of stress in being a retail worker today. You worry about e-commerce. You worry about automation. You worry about what's happening with all the retail jobs that are being lost as stores close.
NOGUCHI: Politicians talk about how to manage job dislocation in coal mining and manufacturing. Now he says it's time to do the same for retail. Yuki Noguchi, NPR News, Washington.
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