6.12. SR 10-18-1999 - Laserfiche WebLink

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. . . Chapter 10 Page 8 of 25 growth in retail women's clothing and apparel in large firms increased by 18,000 employees between 1989 and 1993, while small firms cut employment by 19,000 and medium size firms cut by 16,000 employees. The only light at the end of the tunnel was shown by small retailers in women's apparel with concentration on selling accessories and specialized apparel. It is clear that large retail discount chains like Wal-Mart, Toy "R" Us and Home Depot will continue to extend their lead in sales and growth, unless small firms can perform miracles in providing specialized services. Given the ghetto- like influences on the dying "Main Streets," the specialized successes appear realistically impossible in a substantial way in the near future. Data supplied by G.A. Wright, Inc. based upon U.S. Government SICs show the steady successive gains in chain store employment and declines in small retail employment when comparing 1985 with 1993. Table 16 U.S. RETAIL EMPLOYMENT SHARE Lar e vs. Small Retailers 1985-199314 I Sales Volume 111985 1119931 1$1 million or less 1137.4%1135.5%1 1$1- 10 million 1114.9%1113.1 %1 1$10- 100 million 116.1 % 1~7%l 1$100 million and overI130.9%1~3.4~ ISales not available Ifffi7%J12.3% I ITOTAL 11100%11100%1 It is easy to see from Federal SIC data where employment grew in the years 1989 to 1993 and where ~mployment fell. In men's and boy's apparel retail chains with sales near $100 million, employment grew by 32% while in similar stores with sales of $1 million or less, employment fell by 9.1 %. In women's wear, the over $100 million chains had employment increases of 16.4% over the 1989 to 1993 period, while smaller retailers with $1 million or less in sales saw employment fall by 12.4%. In drugs, the larger chains with sales over $100 million had an employment increase in the years, 1983 to 1993 by 30.2%; while the independent drug stores, with sales of $1 million or less saw employment drop by 28.7%. According to the Wright studies, the consistent losers in sales, growth and employment are retailers in the sales classes of $1 million and $100 million. Thus, the concerns about the survival of the small retailer, must be added to the concerns of the survival of retailers in the $100 million sales class. The national retail discount chains by year 2000 and beyond will have a major negative impact on retail employment. The Wright study examined the closure or termination rate of retailers during the nineties. They provide great concern with the following: "If the company closure rate for the industry of2.9% per year for the first four years ofthe 90's were extrapolated to the year 2000, it would yield a closure rate of29% for the lO-year period of the 90's. It is important to note that this is not 29% of the retail companies that start the http://www.shilsreport.org/chapl0.html 10/6/99