2014 January 26 Sunday
Retail Stores Going Down

Retail store footage to shrink in half in 10 years? Target layoffs, Macy's layoffs, J.C. Penney's layoffs, Sam's Club layoffs and most of these companies are closing stores.

Aside from grocery stores I rarely go to physical stores. A drug store on occasion. Last time I went to a drug store the clerk thanked me for stopping by. I suspect my customer card is tied to a computer system that told him to say that. They know I do not come in as often as I used to.

Online purchases enable more automation because warehouses are easier to automate than stores. The jobs lost in stores aren't getting made up for in warehouses. Once we get robotic delivery vehicles employment related to buying stuff is going to collapse. Imagine a pizza delivery vehicle that pulls into your driveway, you wave your cell phone at it to exchange electronic info, and out pops your pizza that you pick up and carry inside. Throw in some robots in the fast food restaurant kitchens and there's not much left in terms of jobs for teenagers and young adults.

Take away restaurants and retail. Then what are the less skilled people going to do?

Share |      By Randall Parker at 2014 January 26 06:40 PM 

Nobody said at January 26, 2014 7:43 PM:

I hardly ever go to the mall/retail stores anymore. The stores never have the size or color I'm looking for. But I don't see liquor stores or grocery stores shrinking. Here in NJ, the competition is fierce and there are more grocery stores than ever.

Steve said at January 27, 2014 11:48 AM:

The liquor stores will be easier to automate than most. Scan a card, your iris or fingerprint and they will know how much they are selling you as well as dispensing or refusing to serve you. They will do this under the rubric of the "war on alcoholism". A small black market will arise to sell alcoholics their needed liquor at twice the price! Several poor families will use up their alcohol credits every month to feed the demand.Same with cigarettes and even medications. I am an automation engineer and this is simple stuff to automate, in fact it has already been automated and the internet software already exists and can be ported in its existing form without any changes on the machine side. No different than Redbox, same machine, only different sizes of products and different agencies to communicate with at the other end. Blackbuster is already out of business from automation, I would expect that there will be many others soon.

Grocery store automation for most of the boxed/canned goods is easy pickens as well. Only special cuts of meat and vegetables may not be so easily automated. You will fill in your order via app or internet and pick it up or have it delivered for a fee.

Most of the pharmacists who are pill counters will go out of business, they need to change to custom formulating pharmacists. The bankers, in fact all of wall street will be automated as phone apps collect and cash checks already. Anesthetists are being automated and Da vinci is a robot that can be operated by surgeon via internet! there will be a need for the standby expert, but they will run 5 machines that do the actual work.

I have talked with a few businessman in the area, they cannot get minimum wage people anymore because unemployment is more than $300 per week! In fact NC used to be $500 per week. so they are now going to move their higher labor portions outside the US, one I specifically know of is moving 75 jobs to Panama and reducing stateside head count to 10-20 people. With such high unemployment, they want open immigration because they cannot re-hire the people they lay off so they constantly need new workers. Once they get on unemployment and welfare they never work again as it is uneconomic. NC reduced the payout from $500 to $300/wk and their unemployment was reduced by 2 points! That is what you might want to write about next.

A.B Prosper said at January 28, 2014 6:06 PM:

I rarely go to stores either since I need little and want less.

As to your question, the less skilled will become very poor, riot, rebel, vote in fairly extreme redistributionist policies die off or some combinations of these things

As for those who assume lowering wages will actually solve the problems we are facing , no it won't. We've been lowering wages for 30 years or so and the % of wages as GDP is down by half. It has actually made the problem worse despite a huge expansion of social programs. Also no matter how low you go, Capitalism has no real floor. Its appetitte for cost cutting is pretty much endless and lowering wages and therefore puting pressure on prices actually creates a cost cutting spiral.

Baring some resurgence of Henry Fordism combined with an almost Facist level of economic control, pobably imposed after a pretty brutal revolt the only real solutions tried as yet tried combination of disributism and social credit. No guarnatee it will work though and long run the current afluence may simply end do to a demand deficit.

Not a pleasant thought actually.

Randall Parker said at January 28, 2014 8:50 PM:


I am aware of the NC benefits change and have been watching it. Check out a Heritage Foundation analysis on the North Carolina unemployment benefits cut impact on labor market participation rate. We need some more months to tell what the net impact is going to be.

What sorts of jobs do you see getting automated in the next 5 years? What goes by 2030?

A.B. Prosper,

The big change I see coming: a shift of capital out of high population countries. Once little labor is needed in factories not much human population will be needed around the factories. So why not move the factories to wherever taxes, raw materials, and energy costs are lowest?

levoop said at January 30, 2014 3:22 AM:

The unbanked, and those who can't afford online access, or who can't get online access because their government-issued ID is not in order, will desperately hope you are wrong about that prediction.
In an unrelated trend, the cost of owning a car is rapidly rising above minimum wage.

futbol said at January 31, 2014 10:13 PM:

California has a high welfare caseload because it has high taxes which it uses to get federal matching funds other states decline, as well as social workers who help poors with the required paperwork.

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