After one of its toughest years ever, U.S. “brick and mortar” retailers are witnessing a rebound and boosting wages for hourly workers and bonuses for senior executives, according to two separate studies released on Tuesday.
Wages have grown for cashiers and retail buyers among others, a sign that a tight labor market is finally translating into base-pay gains for workers at retailers, according to data gathered from millions of U.S. worker salaries by Glassdoor, a job website operator.
A separate study by consultant and executive search firm Korn Ferry showed nearly one-third of retail corporate executives received at least 100 percent of their targeted bonus, more than double the 15 percent during the same period in early 2017.
A record number of mid-decade store closures and bankruptcy filings, along with rapid growth of online sales, especially at Amazon.com Inc , led investors to sour on the sector over the past two years. But stronger-than-expected earnings in the previous three quarters from many department stores, bargain outlets and apparel brands have started to turn things around.
Growth for retailers comes as the U.S. economy expanded in the second quarter at its fastest pace in nearly four years thanks to a boost in consumers spending, much of it by the bottom 60 percent of income earners – a break with a decades-old trend where the top 40 percent primarily fueled consumption growth, a Reuters study found.
The Glassdoor study shows wages for retail cashiers in July grew by 5.4 percent to $28,145 from a year earlier and rose 2.1 percent to $58,090 annually for retail buyers, who purchase merchandise from manufacturers.
“Despite weak hiring … retail jobs experienced pay gains above the national average, likely caused by the increasing demand for workers who specialize in customer service and integrate more technical knowledge,” Glassdoor chief economist Andrew Chamberlain said in a statement.
Chamberlain said he did not expect wage growth to slow anytime soon as low unemployment spurs competition for workers
Korn Ferry senior partner Craig Rowley told Reuters that the current fiscal year has reversed a five-year trend of fewer executives receiving bonuses. Senior retail executives who received no bonuses grew from 10 percent in 2013 to 29 percent last year but have fallen to 5 percent in 2018, he said.
Rowley said Korn Ferry analyzed data from 65 North American retailers, with median annual sales of approximately $5.2 billion.