Toys ‘R’ Us plans on closing down roughly 180 stores, or one-fifth of their store fleet. The closings begin in early February and will run through mid-April. And before the 2017 holiday shopping season, Toys R Us was also forced to file for bankruptcy protection. Sales were low, the debt was piling. The 180 stores being shut down didn’t meet the “performance standards”.
Why? The rise in online shopping is making it hard for even industry leaders to stay afloat.
Toys ‘R’ Us isn’t alone, either, in the brick-and-mortar retail store race to the bottom.
Stores that are closing, or have closed recently, include:
- Payless ShoeSource, 400 stores
- JC Penney, 138 stores
- Radio Shack, 550 stores
- Sears and Kmart, 150 stores
- American Apparel, 110 stores
The most devastating thing of all, though, is that 4,500 employees will be jobless due to the 180 store closings. These Toys ‘R’ Us employees will be dealing with the painful financial gaps in income and quite possibly going without basic life necessities while they’re on the search for new work. On the other hand, Toys ‘R’ Us—like many businesses who are forced to layoff their employees in times of struggle—are dealing with the moral and legal repercussions. Severance pay and the guilt of leaving 4,500 workers without income are but a few of the consequences.
And unfortunately, retailers far and wide are taking the hits of these layoffs along with the hits of online shopping leveraging Americans’ desire for convenience, and so are their employees.
How does employee financial wellness fit into this? What difference would it make?
- Human to human interaction is the one big leverage brick-and-mortar stores have on online shopping. Happy employees create happy customers, and employers such as Costco and QuikTrip prove the better you treat your employees, the happier your customers, the higher your profits. It is no wonder then that employee financial wellness is the fastest growing benefit that retailers and other businesses are offering their employees.
- In the event layoffs do happen—and unfortunately for many businesses, they will—making sure employees are financially resilient in the event of a layoff will reduce the financial shock put upon them. Employees who are offered a financial wellness benefit have savings, peace of mind, know how to budget, and more. These factors are crucial for someone who’s newly unemployed while on the search for a new, stable job.
Online shopping isn’t going anywhere. That said, employee financial wellness benefit is something employers can start offering their employees today. The ROI is infinite as there is no cost to the business. Your employees can start benefiting right away, with earned wage access, budgeting and saving, financial counseling, discounts, and more. PayActiv's holistic approach to employee financial wellness helps build resiliency so your workers can be prepared to deal with any unexpected financial shocks. Take action today.