Dive Brief:
- Seasonal retail jobs plummeted an unforeseen 7% from October to December, revealing the largest drop since 2016, as analyzed by Challenger, Gray & Christmas using Bureau of Labor Statistics data. This decrease surpassed the 9.6% drop in 2016.
- Transportation and warehousing jobs had a minor drop (less than 1%), contrasting the whopping 67.4% surge from the previous year, as per Challenger's assessment.
- According to Andrew Challenger, senior vice president of Challenger, Gray & Christmas, the steep decline in retail roles was due to the COVID-19 outbreak, parental struggles with childcare, and the abundant job opportunities available across industries.
Dive Insight:
Retail sector experiences a 7% decline in holiday job recruitment
Preceding the holiday season that was projected to break records for spending, retailers were vocal about labor shortages. Few, if any, anticipated the emergence of the Omicron COVID-19 variant and its rapid spread across the U.S.
By just over 684,000, seasonal jobs fell short of Challenger's projection of 700,000 jobs for the season. Both the expected and the actual number were lower than the 736,300 seasonal retail jobs in the previous year. Meanwhile, early data shows a rise in consumer spending compared to last year, leaving fewer staffers to manage the increased sales.
As retailers reveal their holiday season and fourth-quarter sales estimates, some are revealing the disruption caused by Omicron. The virus has been locking both employees and customers out of stores as infections escalate beyond past COVID-19 outbreaks.
For example, Lululemon reported earlier this week about "increased capacity constraints, more limited staff availability, and reduced operating hours in certain locations" due to Omicron. Similarly, Big Lots mentioned "softening of traffic and sales trends" during January, largely driven by the rapid spread of Omicron.
Walmart has temporarily shuttered some stores due to the Omicron wave, while Macy’s has reduced store hours. These operational shifts could be partly aimed at handling staff shortages, analysts suggest.
Two years in, and the pandemic continues to be a prominent aspect of the landscape, with its effects constantly evolving and uncertain as the virus keeps mutating and responses from consumers, authorities, and retailers change. Given that mental and physical health issues were primary reasons for workers exiting the labor force even before Omicron, labor market instability might persist for some time.
Enrichment Data:
Overall: The steep drop in seasonal retail jobs during the 2021 holiday season was primarily due to pandemic-related setbacks and intensified staff challenges accentuated by the Omicron variant of COVID-19.
Causes of Decline in Seasonal Retail Jobs in 2021:- Pandemic-driven uncertainties and operational challenges complicating hiring for retailers.- Persistent labor shortages across retail, hospitality, and other service industries, as consumer spending patterns grew but employment failed to keep pace.- The Omicron variant, which emerged late 2021, sparked a surge in COVID-19 cases, leading to fewer workers available for seasonal retail roles due to illness, quarantine, or concern of exposure.- Seasonal adjustments and revisions in employment data reflected the volatile labor market dynamics occurring during the pandemic.
Impact of the Omicron Variant on Retail Sales and Staffing:- Omicron led to increased absenteeism among retail staff, resulting in constrained retailers’ ability to fully staff stores during critical shopping periods during the holiday season.- Consumer spending exhibited volatility, with some decline in food services and accommodations despite an overall increase since the pandemic. This suggests cautious consumer behavior in response to the Omicron variant.- Retail sales saw declines during periods of Omicron outbreak; for instance, there was a 0.9% drop in retail sales in May 2025 (a later reflection), marking the largest decrease in more than two years, indicating the ongoing impact of pandemic-related disruptions.- Staffing shortages were prevalent in sectors such as hospitality, medical care, and retail, resulting in reductions in permanent placements and temporary job billings at various points, indicating ongoing hiring challenges partly linked to pandemic variants.
- Amid the continuous impact of the pandemic, the AI sector may experience a surge as industries like retail and finance adapt to ongoing labor shortages and operational challenges, with automation becoming a priority.
- The unprecedented rise in consumer spending during the pandemic, even with the emergence of the Omicron variant, has placed increased emphasis on the housing industry, as retailers look for stable income streams and investors seek promising opportunities.
- In the face of ongoing health concerns, the demand for telemedicine and remote healthcare services has surged, opening new avenues for job opportunities in the health sector.
- As the pandemic continues to evolve, the finance industry will play a crucial role in providing aid and assistance to impacted businesses, including those in retail, housing, and transportation.
- In the aftermath of the pandemic, with the labor force experiencing a high turnover rate due to health issues and the ongoing threats of new variants, policy makers are exploring innovative AI solutions for job placement and skills training in various industries, such as retail, transportation, and warehousing.