Retail Jobs Vanish Even as Local Economy Recovers

Shop owners say foot traffic is lower than it used to be, causing a decline in retail jobs. | Hiram Alejandro Durán/THE CITY

By Greg David, The City

This article was originally published on Jul 12 5:00am EDT by THE CITY

NEW YORK - Before the pandemic, the Inaya Jewelry boutiques in Grand Central Terminal and the West Village had 10 employees total and business was brisk.

“We were thriving, with just the right kind of traffic,” said Anyuta Zelikson, co-owner of the stores, where prices range from $95 to $9,000, with an average sale of $350.

Now the Grand Central location is barely back to 50% of pre-pandemic levels, as commuter railroad ridership continues to lag among the store’s clientele of high-level executives.

Business is a little better at the Inaya at Bleecker and West 10th streets in the West Village.

There, traffic has rebounded to about 70% of pre-pandemic levels as the demographics of the neighborhood have shifted toward a younger, more family-oriented base, Zelikson says. Store hours have been cut and the Grand Central branch is closed on weekends, with just four employees between both locations.

While the city may be on the cusp of regaining jobs lost in the pandemic, numbers show the retail sector is still coming up short. 

As of February, retail jobs remained 11% below their February 2020 level, according to a recent comprehensive report by the Center for an Urban Future, and there have been no gains since then. Manhattan has been the hardest hit, with a decline of 20%. 

The shrinkage in office occupancy has also taken an outsize toll on Manhattan retail jobs that had depended heavily on office workers spending money locally. The other boroughs had single-digit declines, with Staten Island down 3% and Brooklyn 5%.

One major reason is as glaring as Amazon Prime Day: shoppers have shifted online. Another is the use of technology within retail establishments, as more and more stores institute self-checkout and pare the number of cashiers. For example, the average staff number at retail businesses shrunk from 10.9 employees pre-pandemic to 10.1 employees today — a  sign of how automation is at work in reducing employment.

“The decline in retail has implications for every neighborhood because retail stores anchor every neighborhood,” said Jonathan Bowles, executive director of the Center for an Urban Future.

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The impact of retail jobs is crucial as Mayor Eric Adams struggles to produce the equitable recovery he cites as one of his most important goals. Workers of color account for seven of every 10 retail employees in the city, and the sector’s struggles are a key reason for the city’s sky-high Black unemployment rate of 12.2%, compared to just over 1% for white workers.

The numbers from the center’s study are sobering.

Overall retail employment in the city as of February had sagged by 38,000 jobs from its pre-pandemic level of about 340,000, even as the nation as a whole regained all positions that had been axed during the pandemic.

Meanwhile, online shopping accounts for 18% of all retail sales and continues to grow. The subsectors facing the stiffest online competition have been hit the hardest, with clothing and accessory employment down a whopping 34%, department stores off 20% and general merchandise, sporting goods and furniture declining about 13%.

Clothing stores have been the weakest category in Brooklyn for Peter Schubert, who specializes in retail leasing at TerraCRG realty group — and he knows why.

“Online apparel retailers are getting really good at marketing to people who are consuming the most — teenage kids,” he said. “I have two teenagers, and my daughter shops online daily for clothing and accessories.”

The rebound in Brooklyn has been fueled by a job shift to food and beverage, as measured by  state Department of Labor figures for restaurants and retail. Food and beverage deals now account for three-quarters of Schubert’s leasing, up from two-thirds before the pandemic. He believes that’s a reflection of how many Brooklyn residents are working from home rather than commuting into Manhattan.

The best hope for Manhattan rests on a rebound in luxury retailing, especially in key corridors like Fifth Avenue. The luxury conglomerate LVMH is reported to have spent as much as $500 million renovating the Tiffany & Co. at Fifth Avenue and 57th Street, part of a wave of investments that include renovations at the flagship stores of Saks Fifth Avenue and Rolex.

Since Tiffany’s reopening in April, nearby stores have reported their sales have surged, said Marie Boster, president of the Fifth Avenue Association.

“Retailers are investing in the experience and things they can only buy here,” Boster said. But, she added, “We can’t take Fifth Avenue and New York City’s retail establishments for granted. Retailers are critical employers.”

Taking a longer perspective, retail employment grew steadily in the three decades ending in 2015. The sector has been slowly declining since it peaked at 360,000 local jobs in 2015, before the losses accelerated in the pandemic. Bowles doubts the city can ever hope to match the 2015 number and emphasizes the implications.

 “Since these jobs go to people of color and those without college degrees, it leaves New York with a problem of accessible jobs,” he said.

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