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Is Brick & Mortar Retail on Its Way Out?

ACWI ADVANCE | Volume 4, Issue 1 | January 15, 2016

2016-01-15_12-39-52In some ways the Christmas shopping season simply confirmed that retail trend towards more online buying, but the speed and scale of this season’s online transformation has shaken the bricks-and-mortar retail model to its foundations.

First the good news: The MasterCard Advisors SpendingPulseGift survey reported that buying was up almost 8% — more than twice the National Retail Federation forecast for the holiday season. Findings are based on MasterCard payments network sales, coupled with estimates for other payment forms like cash and check.

More in line with traditional reporting, were the numbers from First Data Corp., which processes credit-card transactions for 1.3 million retailers nationwide. It said retail sales rose 3.3% from Oct. 31 through Jan. 4, about the same pace as they grew the previous year, and close to the National Retail Federation’s prediction of 3.4% growth in holiday season sales. (AA, 10-31-15, P. 3).

MasterCard Advisors, the professional services division of MasterCard, reported that retail sales, excluding auto and gas, grew by 7.9% during the Black Friday to Christmas Eve shopping season.

Furniture experienced double-digit growth and, apparel saw high single-digit growth overall during the Black Friday to Christmas Eve window. While women’s apparel sales rose by double-digits, men’s apparel declined. Electronics sales also disappointed in spite of earlier robust predictions.

The biggest winner this season was ecommerce. A large factor in recent years, it dominated in 2015.

Its impact was seen in the fact that foot traffic in stores declined 6.4% in November and December, retail analytics firm RetailMetrix reported.

Sarah Quinlan, senior vice president, Market Insights for MasterCard Advisors, observed that “eCommerce’s rise is a solid indication of an empowered and savvy shopper. We’ll be watching to see if this behavior continues into 2016.”

Overall ecommerce buying soared by 21% over the holiday period in 2014, which reportedly put a strain on the major delivery companies.

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Expand Worksite Abatement

OSHA now can seek abatement measures allegedly present at all of an employer’s worksites even if they were never inspected.

In a case involving the trucking company Central Transport, an administrative law judge ruled that OSHA can require an employer to abate hazards existing “upon information and belief” at worksites other than the location where the inspection occurred.

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Furniture Orders Up 1%, Inventories Flat

New orders for residential furniture manufacturers and distributors reported were up 1% in October compared to the same month in 2014. The October survey figures – the most recent available – are reported by the accounting firm of Smith Leonard.

After 18 consecutive months of plus order percentages, the results were up 4% for the year and 6% for the same period in 2014. New orders were down for a majority of the survey participants in October-only results, but remained up year-to-date for about 55% of them.

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EEOC Methadone Suit May Be Omen

2016-01-15_12-59-40The Equal Employment Opportunity Commission sued an employer for refusing to hire a recovering drug addict who was using methadone, alleging Americans with Disabilities Act discrimination

Over the last three years, EEOC has filed numerous lawsuits against employers because they took adverse actions against applicants and employees who use prescription medications, notes Kathryn J. Russo, an attorney with the law firm of Jackson Lewis PC.

EEOC alleges that a woman who is a recovering heroin addict enrolled in a supervised methadone treatment program was rejected for a job as a production laborer due to her use of methadone.

A manager is said to have told her: “I’m sure we don’t hire people on methadone, but I will contact my supervisor.”

She gave the employer information from her treatment clinic confirming she had no restrictions other than not being able to work as a truck driver or airline pilot. She was never asked to take a drug test and ultimately was not hired.

Russo warns employers to pay attention to this case because of the growing nationwide heroin epidemic.

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