Brick and Mortar Stores' Worst Nightmare

The following chart shows the 2-year moving average of nonstore retail employment.


Click to enlarge.

I have good news, bad news, and a worst nightmare for the brick and mortar retailers.

First, the good news. Few Americans read Canadian Living. You therefore don't have to worry too much about consumers using smart phone apps that will cost you money. Hey, I'm just trying to start off on an optimistic note. It's the best I can do.

Next, the bad news. Nonstore retail employment was growing parabolically. That just can't be good for you over the long-term.

And now, the worst nightmare. The nonstore retail employment parabolic trend failed this year. Normally, you'd think a failure here would be good news, but, well, I don't really know how to put this, it kind of failed to the upside. Sorry about that.

We should not dwell on the negative though. This is fantastic news for our economy. Nonstore retailers have added 2,300 jobs since the peak in 2000. Hooray!

So what if  440,000 jobs have been cut by department stores since the peak in 2001? The employment bleeding can't go on forever, right? Over the long-term, we certainly can't lose more than 15.4 million retail jobs overall. That's just right out.

A tragic or comic plot is not a straight line: it is a parabola following the shapes of the mouths on the conventional masks. - Northrop Frye

Now would probably be a good time to once again point out that no economic parabola can grow forever, even ones which fail to the upside. It will more than likely end in tragedy and/or comedy someday, perhaps much sooner than most expect. In fact, the term "blow-off top" comes to mind.

Source Data:
St. Louis Fed: All Employees: Retail Trade: Nonstore Retailers