Retail Heading Into Holidays With Jobs in Four-Month Slide
By JENNIFER BELLANTONIO and RAJIV VYAS
Orange County’s retailer sector is heading into the holidays in a grim mood.
Retail jobs in the county declined for the fourth month in a row on a yearly basis in October. The sector, OC’s largest by workers, employed 246,500 people in October, down by 1,800 jobs from a year ago.
“The retail sector is cyclical and it follows the rest of the economy,” said Lisa Grobar, professor of economics at California State University, Long Beach.
The last time retail jobs contracted for four months straight before the holiday seasons was in 1989, 1991 and 1992, during the recession.
This year’s trend isn’t across the board. Most of the cuts have come from general merchandise and grocery stores, where competition is toughest. Other retailers say they’re bulking up for the holidays like they do every year.
“Generally speaking the numbers are similar to last year,” said Susan Sittig, regional director of recruitment and executive placement for Macy’s, part of Cincinnati-based Federated Department Stores Inc.
Home improvement stores and automotive dealerships,both beneficiaries of lower interest rates,have been adding jobs. The last time home stores had a job contraction was in 1995, while auto dealers have been growing for the past year and a half.
But retailers may not be able match last year’s jobs tally. Last December, the sector counted about 256,000 workers. This year, employment could be closer to 250,000 workers, according to Jack Kyser, chief economist with the Los Angeles County Economic Development Corp.
The county hasn’t seen a wave of big store closures but rather streamlining by retailers, economists say. Struggling Kmart Corp., for one, closed a Fountain Valley store earlier this year and likely has pared workers from other stores.
Kmart and others are facing stepped up competition from Wal-Mart Stores Inc. and Target Corp., which are selling more clothing and food at their stores.
“It’s the incredible pressure in retail sector,” Kyser said. “Wal-Mart and Target have become major forces in Southern California. They are big and efficient.”
Grocery stores have felt the heat. Safeway Inc.’s Vons has cut about 400 OC jobs in the past year and now employs about 2,685 people here.
General merchandise stores have pared jobs for each of the past 12 months, while food stores have employed fewer people for the past five months.
Apparel stores have seen job contractions for the past three months. But not everyone is cutting back.
Anaheim-based teen apparel retailer Pacific Sunwear of California Inc. plans to hire about 5,600 temporary workers for its stores, said director of store operations Tim Boreland.
That’s up from last year, Boreland said, with the opening of new stores in the past year.
“The stores will literally almost double their sales teams over the next few weeks,” he said. “We’d rather over hire because there’s nothing worse than being short-handed during the holidays,” Boreland said.
The first wave of hires is set to be trained and in place by this weekend, which kicks off the holiday shopping season. Temp workers stay on until the first week of January, Boreland said.
Bigger retailers such as Sears and Robinson-May have been making their stores more efficient in light of new competition from Menomonee Falls, Wis.-based Kohl’s Corp., a discount department store known for its lean operations.
Kohl’s is expected to open seven OC stores in the first quarter with each store expected to create 200 jobs.
One of the changes brought about by Kohl’s, Wal-Mart and Target: centralized checkouts.
“Sears has centralized checkouts and so has J.C. Penney” at their OC stores, Kyser said. “They are all getting ready for the Kohl’s onslaught because that’s the way Kohl’s work.”
There’s still a chance retailers could add jobs in the coming two months, Kyser said.
“I would expect a little bit of firming,” he said. “It looks like travel and tourism,as indicated by advance booking at Disneyland,is picking up.”
Even so, the fourth quarter isn’t likely to be as strong as last year.
Initial indicators of holiday sales are lukewarm at best. For the week ended Nov. 16, national retail sales were down 1.2%, according to Bank of Tokyo-Mitsubishi’s weekly report.
“To achieve last year’s numbers you will need to have a huge change in consumers’ attitude,” Kyser said.
