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U.S. Retail Sales Plunge in December – Layoffs & Store Closures

February 5th, 2014 Leave a comment Go to comments
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U.S. Retail Sales Plunge in December – Layoffs & Store Closures

original article written by Net Advisor

WASHINGTON DC. For an economy in its sixth year of “recovery,” retail holiday sales came in the worst in four years.

“U.S. retailers posted their lowest holiday sales growth in four years after shoppers stayed at home despite some of the biggest discounts and promotions since the recession, retail industry tracker ShopperTrak said.”

— Source: Reuters

Sears saw a 9.2 percent decline in sales and K-Mart (owned by Sears) saw a 5.7 percent sales decline. Amazon.com reported that is could see a possible loss after missing holiday sales expectations. Amazon’s stock fell 9 percent on the news.

Millions of Jobs and Millions of Job Losses?

The U.S. Bureau of Labor Statistics reported (PDF – highlighted) that between March and June 2013 there were 7.1 Million job gains in the economy.

This sounds pretty good until you factor in that over this same period, 6.5 Million jobs were lost. Sure, the net is a plus 600,000 gain over three months, but if the economy was truly growing, how do you lose 6.5 Million jobs in three months or 72,222 lost jobs per DAY, or 3,009 lost jobs per hour?

One could draw a slightly better rate on job gains, but if the economy was really growing and expanding as we have been told over and over for the last five years, should we have these massive lay offs?

Retail store, Macy’s plans to cut 2,500 jobs. J.C. Penny plans to terminate 2,000 jobs and close 33 stores. In J.C. Penny’s case, part of this could be attributed to the economy, however in my analysis Penny’s is probably a retailer that will end up in bankruptcy due to bad management.

Intel recently announced it would reduce its workforce by five percent or more than 5,000 workers. Computer maker, Hewlett Packard announced another 5,000 layoffs, for a total of 34,000. International Paper to close a plant and layoff 1,100 jobs in early 2014.

Ford announced it would layoff about fifty-percent or more than 900 workers at its Ohio assembly plant. Ford said that it is just matching supply with demand. If this is the case, then that means people are buying fewer cars made from this plant. Ford hopes to rehire workers at another time.

Other retailers such as Radio Shack is expected to close 500 of its 4,500 stores. I’m actually surprised Radio Shack is still in business. Radio Shack’s stock (NYSE: RSH) is the lowest its been since before 1980, and closed at $2.22 per share on February 5, 2014.

Even retail giant Wal-Mart announced it was going to layoff two percent or 2,300 of its workers at its Sam’s Club division.

A ‘Tsunami’ of Retail Store Closures?

Last year, a whole host of retailers planned to close stores. According to John Kernan, vice president, and retail analyst for Cowen & Co. expects a “tsunami” of retail closures to come (HTML PDF). Retail consultant Barbara Farfan, published a list (HTML PDF) of the store names and quantity of expected store closings for 2014.

U.S. Company Job Growth — in Canada.

While U.S. employers such as Wal-Mart is cutting out employees, and Target is cutting out health-care benefits for some 36,000 part-time employees, these companies are expanding in Canada.

Wal-Mart plans to invest nearly $500 Million in Canada and create 7,500 jobs there. Target also plans (PDF) to increase its store brand in Canada.

If broad-based U.S. layoffs and retail store closures are the “economic recovery,” what does a recession look like?

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Image credit: Sears store closure image: public domain, image modified.

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