5 Labor Trends That Could Rock the C-Store Industry
By Alaina Lancaster on Apr. 06, 2017CHICAGO -- This year’s NACS State of the Industry Summit channeled folk-rock legend Bob Dylan to reflect the evolving retail channel. And with technology, politics and innovative formats converging to change the definition of convenience, it would appear that the times, well, they are a-changing.
Here some of the jolting labor trends retailers and speakers unpacked at the conference ...
1. Trade-war fallout
President Donald Trump’s “America First” trade policies could create serious consequences for the U.S. economy, according to presenter David Nelson, professor of economics at Western Washington University. Trump has floated the idea of adding a 45% tariff on China’s exports and has promised to impose policies aimed at correcting trade abuses. If the United States incited a trade war with China—the U.S.'s top trade partner—the abrupt surge of trade costs could throw the economy into a recession and raise unemployment to 8% in just two years, Nelson said.
2. Even tighter labor markets
If a trade war does not ensue, retailers might want to get used to a rigid labor market. In February, the United States added 235,000 jobs, and the national unemployment rate dipped to 4.7%. Nelson said the rate will likely continue to fall slowly—projected to reach 4.6% in 2017 and as low as 4.4% in 2018.
Another factor that is creating an uphill battle for hiring managers is a disappearing low-wage, high school-educated workforce. “You’re probably going to have to pay more for people with some amount of higher education because that [low wage workforce] is shrinking,” he said.
3. Immigration effect
Nelson suggested that reduced immigration could drain the labor pool further. In fact, an immigration ban would reduce the working age population from 173 million to 166 million, he said.
“Our country is richer and stronger because of immigration,” he said. “A measured flow of immigration can help our demographics, it can help our rate of economic growth, and I think it’s good for [the c-store] industry in terms of an enhanced customer base and enhanced employment pools. Immigration can keep the working-age population in the U.S. from falling.”
4. Persistent wage growth
C-store hourly wages have been on the rise since 2010, said Billy Milam, president for Atlanta-based convenience-store chain RaceTrac. In 2016, associate earnings reached a record average of $9.99 per hour, marking a 17% increase over four years. At least 20% of that wage growth comes from state initiatives to raise the minimum wage, he said.
5. Overflowing turnover
Store associate and manager turnover also saw some steep increases this past year. Associate turnover rang in at 133%, up from 95% in 2015. After enjoying turnover that hovered below 18% for the past six years, manager turnover topped off at 27% in 2016. Milam said the industry is facing a supply and demand problem from restaurants and competitors such as Dollar General, which plans to create 10,000 new jobs in one year. “The pond they’re fishing in is the same one we’re fishing in, and it’s becoming really, really competitive,” Milam said.
To curb turnover, c-store chain Speedway, based in Enon, Ohio, is investing in its onboarding process. Whereas Kwik Trip Inc., a convenience store chain based in La Crosse, Wis., is hiring more recruiters. “We now have close to 20 recruiters who focus mainly on finding the right management people,” said Jeff Wrobel, vice president and CFO of Kwik Trip.