The news: Private sector employers added 475,000 jobs in February, including 170,000 leisure and hospitality jobs (where retail workers are grouped), per ADP’s monthly jobs count. Those strong numbers are making competition for retail workers increasingly tough and leading them to feel empowered.
More on this: While many large retailers are increasing wages, those increased costs haven’t hurt their bottom lines, per The Wall Street Journal.
Profits for these companies are also increasing, supported by strong sales growth and efforts to control costs in other parts of their operations, per The Wall Street Journal.
Analyst take: “Store associates are retailers’ front line,” said Suzy Davidkhanian, eMarketer principal analyst at Insider Intelligence. “They’re critical to the brand experience. Experienced, knowledgeable employees are a differentiator. We know that employees attribute a lot of value to pay and that unhappy employees are more likely to leave. Turnover is bad for the customer experience and expensive for retailers."
Unionization fights: The tight labor market is also empowering workers to seek change from their employers.
The big takeaway: The current labor market is leading many retailers to recognize that boosting store and supply-chain workers’ pay can be good for business. It ensures their stores are staffed with well-trained employees, which can help keep shoppers satisfied despite higher costs due to inflation.