Weekly Retail Update: May 22, 2017
- May 22, 2017
Foot Locker Sees Start Slow in Q1
After high expectations for a booming first quarter, Finish Line reported weaker earnings than expected. The athletic and apparel retailer reported a net income of $180 million for the first quarter, $11 million shy of the first quarter in 2016. “The first quarter was one of our most profitable quarters ever, but it did fall short of our original expectations,” said chief executive Richard Johnson. “The slow start we experienced in February, which we believe was largely due to the delay in income tax refunds, was unfortunately not fully offset by much stronger sales in March and April. Nonetheless, we believe our banners remain at the center of a vibrant sneaker culture. We are confident that our customers have not lost their tremendous appetite for athletic footwear and apparel and that our position in the industry is stronger than ever.” (CSA)
Automation Could Lead to 7.5 Million Layoffs
According to a new report from investment firm Cornerstone Capital Group, nearly 7.5 million jobs could be at risk with the adoption of automation. The study found that retail cashiers will be the most affected, more than half of whom are women. The rise of automation will not only affect retail workers, but also the economy. According to the executive director of the Investor Responsibility Research Center Institute, John Lukomnik, “This in-depth examination of retail automation gives investors insights as they consider investment risks and opportunities. While the findings are important to investors, they should sound the alarm for economists and political leaders. The shrinking of retail jobs in many ways threatens to mirror the decline in manufacturing in the U.S. Moreover, in this case, workers at risk are already disproportionately working poor, so any disruption may cause strains in the social safety net and stresses on local tax revenues.” (Business Insider)
Teens No Longer Dominating in Retail
While less teens are working in retail these days, it is not because of lack of jobs, but instead due to societal shifts. These days, young adults are more focused on seeking jobs that are non-traditional and may contribute more to their long-term career goals instead of just making money. “In the last couple of decades, parents have placed greater emphasis on the rewards of education, diminishing the traditional push to get a first job. BLS also says rising college tuition rates could be blamed for fewer teenagers working, as entry-level wages aren’t expected to make a dent in a large tuition bill.” (NRF).