The US labor shortage is about to create a big problem for retailers

This shop in California is hiring.
This shop in California is hiring.
Image: Reuters/Mike Blake
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Americans are eager to shop—but many US retailers aren’t ready for them.

Amid a wider labor crunch in the recovering US economy, a number of shops have had trouble filling open positions. That leaves fewer staff to do the work of stocking shelves, helping customers, cleaning, monitoring inventory, and all the other tasks necessary to keep a business running smoothly. As Covid-19 vaccination rates rise, the weather warms, and restrictions on shoppers diminish with falling infection rates, retailers will soon feel the staffing shortage even more acutely.

“One of the terms I hear all the time is revenge shopping,” said Mark Matthews, vice president of research development and industry analysis at the National Retail Federation, a large trade association. “People really want to go out there and shop. If we’re not able to get people hired and back in stores, that’s going to be problematic.”

There are numerous debates happening right now about how significant the labor shortage really is and what’s behind it. Low wages for workers, overly generous unemployment benefits, lack of child care, fear of catching Covid-19, and Americans reassessing what type of work they want to return to after the pandemic have all been cited as potential culprits, or at least contributing factors.

Whatever the causes, Matthews said retailers are feeling a staffing pinch. “It’s definitely an issue,” he said. “Particularly in the last two to three weeks, we’ve been hearing more and more of it from our member firms.”

Retailers aren’t feeling the labor shortage equally

But not all stores are experiencing the shortage equally. Target said on a May 19 earnings call that it’s had no difficulties with hiring, thanks to decisions such as its choice to raise its minimum wage last year and its investments in employee health and safety.

Macy’s, on the other hand, said on its May 21 earnings call that it’s trying to fill a number of open position in its stores and distribution centers. 7-Eleven franchisees say they don’t have enough workers to keep stores open 24 hours. There are also plenty of anecdotal examples of stores in places such as Sioux City, Iowa, or Great Barrington, Massachusetts, straining to find help.

Data from the US Bureau of Labor Statistics show that job openings in retail have risen steadily for the past six months. Preliminary figures from March showed 878,000 retail openings—not a record, but higher than any point in the past two years.

Retail is one of the largest employers in the US, and Matthews pointed out that, despite its current challenges, the industry has added 2 million net jobs since April of last year. That’s just store-based employees and doesn’t include other hiring, such as in distribution centers, where companies have brought in more workers to handle the boom in e-commerce sales.

The shift to online shopping, in fact, could help assuage some of the store staffing issues—if it keeps foot traffic muted.