Alaska's retail sector is shedding jobs after years of growth

As retail employment hits record highs nationally, Alaska's retail jobs numbers are headed in the opposite direction.

Job losses in oil and construction slowed the state economy in the past year and a half, but Alaska's retailers appeared to show more resilience, at least for a spell. But updated state data show the sector, which includes big-box stores, car dealerships and booksellers, also began cutting positions starting this spring.

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In Anchorage, the state's commercial hub, the sustained downturn in retail jobs began in April, following weak growth in the first quarter. Losses accelerated each month through June, with Anchorage down 486 retail positions that month compared to June 2015.

Statewide, the number of retail positions began shrinking in May. By June there were 728 fewer retail jobs statewide, a loss of about 2 percent of all positions in the sector, according to year-on-year numbers from the state Department of Labor and Workforce Development.

Meanwhile, the U.S. as a whole has been adding jobs. Retail employment has recovered from the recent lows of the Great Recession and is now at about 16 million jobs, the highest levels in a decade, according to the U.S. Bureau of Labor Statistics. That's despite high-profile layoffs at traditional retail stores as they struggle to compete with online rivals.

In Alaska, retail jobs estimates for the second half of 2016 showed a continuing decline. An influx of tourists each year makes summer the high season for Alaska retailers. Still, statewide employment in the sector continued to drop during the sunny months even as Alaska posted another consecutive year of strong visitor numbers.


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The year-on-year reductions in retail jobs continued through the fall, when the issuance of Permanent Fund dividends generally prompts a spending binge. But consumers had less to spend this year, with the $1,022 distributions about half the size of last year's. Retail employment during the early part of the holiday season was also down, though December estimates have yet to be released.

Upcoming revisions to the preliminary data from July through November will not likely alter the downward trend, said state labor economist Neal Fried. Should retail continue to shed jobs through the end of the year, it would mark the longest decline the sector has seen in at least a decade in Alaska.

"The trend is already in play. I don't know what would change that trend," Fried said. 

High turnover in retail jobs, which include serving as a sales associate at Gap or  "guest experience specialist" at Petco, means employers tend to eliminate vacant positions rather than lay people off, according to Fried.

Holding off on hiring is exactly what Kim Stalder, who has owned the downtown fashion boutique Circular for nine years, chose to do. Her only full-time employee left in March after a six-year stint at the store. Stalder opted not to replace her.

"Because things are not great in the retail sector, I thought, 'I'm just not going to hire again,'" Stalder said. She decided it would be more prudent to take on the former employee's hours herself and says she knows other small business owners doing the same. Now, she has two part-time employees.

Despite the negative outlook for retail as a whole in Alaska, there are some bright spots. Grocer and general merchandiser Fred Meyer has not eliminated any company positions in Alaska for several years and is still hiring, according to Zach Stratton, a spokesman for the chain, which is owned by national food retailer Kroger.

"In fact, with the new Palmer Fred Meyer store opening in March, we are actually adding about 100 jobs," Stratton wrote in an email. "We understand the tough retail environment currently but also feel good about the future and continue to invest in Alaska."

While the overall employment losses and pullbacks in state spending suggest a dampening in consumer spending, there are no statewide sales numbers to definitively show Alaska consumers are buying less — and if they are, by how much.

In nearly all other states, retail spending can be tallied through sales tax data. But there is no statewide sales tax in Alaska and no local sales tax in Anchorage, where most retail activity takes place.

Insights from larger retailers aren't readily available because they consider sales information to be proprietary. Calls and emails requesting such information from major market players, including Wal-Mart, Fred Meyer and Target, were met with refusals.

Some Alaska localities do collect a sales tax and keep records on gross retail sales, including the City of Wasilla, the Kenai Peninsula Borough and the City and Borough of Juneau.

The Kenai borough is on track for a second straight year of reduced retail sales. Sales for the first three quarters of 2016 were $725 million, down by $29 million — or about 4 percent — from the first three quarters of 2015.

The drop in retail dollars wasn't all bad news. There has been a reduction in consumer sales activity in the borough, but a substantial portion of the drop in retail receipts was due to falling gas prices, which are included in the calculation of retail sales, said borough Finance Director Craig Chapman. On average, gas prices in Alaska were above $4 per gallon in mid-2014 and dropped to just above $2 a gallon by early 2016.

In Juneau, there was a $7.5 million drop in retail sales between the first nine months of 2015 and the first nine months of 2016, but city finance director Clayton Singletary said the 2016 figures could still rise to some extent as "numerous merchants" have yet to submit reports to the city.

Wasilla showed a jump in gross retail sales from fiscal year 2015 to fiscal year 2016, but those annual numbers do not show what has happened in retail there after June 2016, when the city's fiscal year ends, nor do they show year-on-year comparisons by month (for example, May 2016 sales versus May 2015 sales).


The lack of comprehensive sales numbers leaves some room for speculation about what job losses in retail say about the state's economy. Have Alaska's retailers become more organizationally efficient or introduced new technologies that displace workers without harming sales and profits?

Fried is doubtful. The effects of increased efficiencies would not have been seen in such a short period of time, he said.

"It's possible that employment in retail is not tied to sales," he said. "But my guess is it probably is."

What about the theory that Alaska consumers are still spending at pre-recession levels, but taking their business to online retailers rather than sellers with a brick-and-mortar presence in the state? That's another mystery — there's no data available that shows how many consumer dollars are being spent online rather than in Alaska's retail stores.

Jeannette Lee Falsey

Jeannette Lee Falsey is a former reporter for Alaska Dispatch News. She left the ADN in 2017.