Alaska Retail Business Update
There has been a lot of discussion around the retail industry in Alaska the past few months, as reported in the Department of Labor’s Alaska Economic Trends April edition. Retailers who have had recent closures include Toys R’ Us, Sam’s Club, and Sears. The stores employed approximately 500 people throughout Alaska. All three decisions were made because of national factors, but still hurt the Alaska economy where retail makes up approximately 11 percent of all jobs.
In 2017, the retail sector had over 36,000 jobs in Alaska. The largest category for retail jobs was general merchandise, with nearly 30% of the jobs in the sector. Food and beverage was 2nd with over 15% of jobs. 2017 was the 2nd year in a row that the industry has lost jobs since 2010. While most categories have lost jobs between 2015 and 2017, general merchandise has remained flat while miscellaneous has had a slight gain. The decline in construction activity and a flat real estate market has caused a decrease in the building materials/garden categories. Sporting goods, books, and music has also seen a large decreased due to the closing of Alaska’s four Sports Authority stores. Again, this was a national decision, but still caused the category to lose over 10 percent of its jobs over two years.
There were a few bright spots in the retail trade. Some communities even added retail jobs between 2015 and 2017. The areas that added jobs were typically ones that were less affected by the recession because of their lack of dependence on oil. These include Wrangell, Kodiak, Bristol Bay, Dillingham, and Southeast Fairbanks. These markets are small, and therefore couldn’t make up the losses that were seen in Anchorage, Juneau, the Mat-Su Borough, and the Kenai Peninsula.
Even with the recent losses, new stores are popping up in major markets. In March 2018, Duluth Trading Company opened a store in the former Sports Authority building in South Anchorage. Carrs-Safeway is returning to the former Mall at Sears, although in a different location, and Fairbanks is adding a Costco to make up for the loss of Sam’s Club in late 2017. This follows the trend of new stores overshadowing the stores that were lost during difficult economic times. Retail will continue to be a large part of the economy and can be an indicator to how the economy is fairing throughout Alaska.