US stores may be reopening but workers are finding it hard to rejoice
Across the US, states are opening again and the shoppers are returning after the coronavirus pandemic led to an unprecedented slump for retailers. But for those who have lost their jobs in the retail lockdown – a return to “normal” looks a long way off. And for some it may never come.
Amy Christine Lacombe, a sales associate at Pier One Imports for nearly two years outside New York City, is one of hundreds of workers at the company which filed for bankruptcy shortly before the pandemic, and is now closing all 540 of its locations after it was unable to find a buyer. Pier One executives cited the impact of the pandemic on the retail industry in announcing the decision in May.
“All of the employees are just completely out of luck with zero assistance toward helping us find new jobs. It’s been an extremely difficult time for me. I have four children,” said Lacombe.
The retail sector is the US’s largest private employer – accounting for 29m jobs. But even before Covid-19 it was an industry in transition, suffering from oversupply, changing consumer habits and the shift to online shopping.
Several retail corporations filed for bankruptcy or enacted restructuring plans before the pandemic. When the coronavirus quarantines struck, retail went into a tailspin. Sales have moved online but volume collapsed and traditional brick-and-mortar retailers lost customers at a record rate. Some 2.7m retail jobs were lost in March and April. May saw 368,000 rehired but it is still too early to say how many of those jobs
have been permanently lost.
In April, retail sales dropped 16.4%. Clothing stores were hit hardest with a 78.8% sales decline, electronics and appliances declined by 60.6%, and furniture and home furnishing saw a decline of 58.7%. Sales rebounded sharply in May 2020, with a record 17.7% jump from the previous month, though many sectors of the retail industry are still lagging behind and retail sales were down 6.1% compared to May last year.
Coresight Research, an advisory and research firm specializing in retail and technology, forecasts there will be 20,000-25,000 retail store closures in 2020, compared to the record 9,548 retail stores in the US that permanently closed in 2019. Job losses are likely to be huge, but they won’t attract the sort of political attention losses in far smaller industries, such as mining, can count on. The losses will be felt most by women and people of color, the dominant demographics of the retail industry.
“It’s very challenging for retailers because every state has a different opening calendar, different rules and regulations,” said Deborah Weinswig, CEO and founder of Coresight Research. She noted retailers are facing various challenges in reopening, experiencing increases in returns due to the closure of dressing rooms and reliance on online purchasing, and difficulty in bringing back workers who were furloughed.
Retail corporations such as Neiman Marcus, J Crew, Tuesday Morning, JCPenney, and several others have already filed for bankruptcy, with some already rolling out plans to liquidate stores and permanently lay off thousands of workers.
Several other retail corporations have announced plans to downsize their brick-and-mortar footprint in the US with permanent store closures and layoffs planned, including Office Depot, Victoria Secret, Nordstrom, Bed Bath & Beyond and GameStop. Other retailers, such as Macy’s, Bose, Forever 21 and Walgreens, had announced plans to shut down store locations around the US before the pandemic.
Office Depot unveiled a restructuring plan in May 2020 that includes more than 13,000 layoffs and permanently closing dozens of stores around the US by the end of 2023, though the company’s sales have reportedly been doing well as stores remained open during the pandemic.
An Office Depot sales associate in West Virginia, who requested to remain anonymous for fear of retaliation, explained workers are facing increasing pressure to hit sales goals to avoid losing their jobs in the near future.
“We are feeling a lot of pressure to work harder than we normally do to keep our store numbers up so there aren’t many negative marks to us and our store,” said the employee. “At my store, hours are getting cut dramatically. I went from receiving around 40 hours a week, sometimes hitting overtime, to getting at most 25 hours a week. From what I understand, my store isn’t at threat of closing in the near future, but it’s really scary knowing that it can change so quickly.”
An Office Depot spokesperson did not comment on the hour cuts or sales goal pressures on workers. “Implementation of the restructuring plan is expected to be substantially completed by the end of 2023 and may potentially include retail store and distribution facility closures and headcount reductions,” said the spokesperson in an email.
Victoria’s Secret announced in late May the company will permanently close 235 retail stores in the US and three Pink stores, citing sales declines related to the pandemic. The closures are nearly 25% of the company’s retail stores in the US. The company also noted additional store closures are likely in 2021 and 2022.
“I was working almost 40 hours a week. Unless you’re management, you don’t have full-time hours. I was cut down to 25 hours a week before the store shut down due to the pandemic,” said a Victoria’s Secret sales associate in north central Florida. They filed for unemployment benefits and it took several weeks to start receiving payments. Their store has yet to reopen or finalize a reopen date. “Our store hasn’t closed where I work, but we’re making basically minimum wage maybe a little above that. We have a weekly goal to meet our sales needs to stay open, and they’re not always met.”
Nordstrom announced in May 2020 the permanent closure of 16 stores that will take effect this year, citing losses incurred due to coronavirus closures, as some stores have started reopening.
“My store hasn’t closed but as the restructuring trickles down to my position in sales I really don’t know what will happen,” said a sales associate in California who requested to remain anonymous for fear of retaliation. They noted stores are also being restructured, with different departments consolidated into others. “My main concern is, as a commissionbased employee, how my pay will be impacted by the inevitable slow down in foot traffic sales?”
A Nordstrom spokesperson deferred to a news release which made no mention of lost commission to sales associates. The news release noted, in addition, the closure of 16 stores around the US. Pier One Imports and Victoria’s Secret did not respond to multiple requests for a comment.
The worst may not yet be over. As reopening continues, coronavirus cases are increasing. A second wave of infections and quarantines could be devastating for an industry that was struggling before Covid-19. Even as sales come back, the future looks uncertain for retail workers. “It’s kind of impossible to look for a new job in these times,” said Lacombe.