Though the coronavirus pandemic had a profound impact on the U.S. economy as a whole, restaurants, hotels, and retailers took a notably hard hit. Early on in the pandemic, restaurants and nonessential retailers were forced to shutter to guests and customers, and even once they were allowed to open, they faced restrictions that limited revenue in a very meaningful way. Hotels, meanwhile, saw record-low occupancy rates last year as travelers stayed close to home in an effort to protect their health.
But now, things are very different. On a national level, coronavirus-related restrictions have largely been lifted, and there's already a travel boom happening that's apt to help hotels recover from the events of the past year.
Restaurants, however, have been struggling to find workers, which is hindering their ability to move past the pandemic. And now, retailers are increasingly landing in a similar boat.
Retail positions are a hard sell
In April, 649,000 retail workers left their jobs, representing the sector's largest single-month drop in labor in 20 years. Some retail workers are leaving to pursue less stressful positions. Others are planning to go back to school to position themselves for more lucrative careers.
Either way, retailers now have a new crisis on their hands. And if they don't manage to solve it, they'll risk having to close their doors.
Why the mass exodus?
Now that mask mandates have been lifted, some retail employees may not feel safe reporting to work. This especially applies to those who have not yet been able to get vaccinated.
Of course, part of the problem may also have to do with the $300 weekly boost the jobless are getting in their unemployment benefits. That boost came as part of the $1.9 trillion American Rescue Plan, the relief bill that was signed in mid-March that also allowed for a round of $1,400 stimulus checks.
So far, 26 states have pulled the plug on that $300 weekly unemployment boost ahead of its early September expiration date, citing labor shortages. But in the remaining half of the country, that boost is still in place, and it may be keeping some lower-wage workers out of the labor force. After all, with that boost in effect, many jobless folks are earning more money on unemployment than they would working at a retail establishment.
Retailers need to get creative
Clearly, retailers can't stay open if they're grossly understaffed. As such, they may need to get creative to stay afloat in the near term -- at least until early September, when boosted unemployment runs out. That could mean offering hiring bonuses, implementing flexible schedules, and coming up with other perks, like free or heavily discounted merchandise as an incentive to take or keep a job.
Of course, raising wages is another smart tactic to employ. But given the hit so many retailers have taken in the course of the pandemic, that may not be within their budgets.
Either way, real estate investors will have to hope that retailers manage to find a way to solve the current labor crisis -- and avoid shuttering for good. Many stores have already permanently closed their doors due to the pandemic, leaving shopping centers and malls with widespread vacancies. Now that consumers may finally be in a place where they're comfortable shopping at stores, retailers can't afford to lose out on that momentum, and if they miss that boat due to a lack of workers, it could be catastrophic.