admin

The new year for brick-and-mortar retailers is picking up right where 2024 left off, as a slew of stalwart brands are set to shutter dozens of store locations amid shifting consumer patterns.

The latest crop of closures are being led by fabrics and crafts retailer Joann, which said this week it was shuttering 500 locations in 49 states as part of a second go-around in Chapter 11 bankruptcy reorganization.

“This was a very difficult decision to make, given the major impact we know it will have on our team members, our customers and all of the communities we serve,’ the company said in a statement. ‘A careful analysis of store performance and future strategic fit for the company determined which stores should remain operating as usual at this time. Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward for Joann.”

Joann first filed for bankruptcy protection last March to address a heavy debt load, shrinking revenues and what it described as an “uncertain consumer environment.” It announced another Chapter 11 filing last month, this time with the goal of finding an entity to acquire all of its assets.

‘The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,’ it said in a release accompanying its latest filing.

Meanwhile, JCPenney separately said this week it was closing a handful of stores, with an initial batch of eight to go under depending on “expiring lease agreements” and “market changes.” 

“While we do not have plans to significantly reduce our store count, we expect a handful of JCPenney stores to close by mid-year,” the company said in a statement.

JCPenney emerged from bankruptcy in 2020; last month, it announced it was merging with the group that operates other retail brands, including Aéropostale and Brooks Brothers.

In the first nine months of its current fiscal year, JCPenney’s adjusted earnings tumbled nearly 64% to $66 million.

Those results reflect an overall physical retail environment that continues to deteriorate. According to Coresight Research, as many as 15,000 retail locations could close this year, nearly doubling the count for 2024, which were already the most since 2020, the first year of the Covid-19 pandemic.

“Inflation and a growing preference among consumers to shop online to find the cheapest deals took a toll on brick-and-mortar retailers in 2024,” Coresight Research CEO Deborah Weinswig said in a release last month. “Last year we saw the highest number of closures since the pandemic. Retailers that were unable to adapt supply chains and implement technology to cut costs were significantly impacted, and we continue to see a trend of consumers opting for the path of least resistance.’

She said customers are running out of patience for stores that are ‘constantly disorganized, out of stock, and that deliver poor customer service.’

‘We have seen Shein and Temu capture market share as consumers choose to shop online to save time, money, and avoid frustration,’ she said.

In the first weeks of 2025, Coresight was already tracking about 30% fewer openings and more than triple the number of closures compared with the same period last year.

Other closures announced late last year or planned for 2025 include Party City, Big Lots, Kohl’s and Macy’s.

Italo Medelius-Marsano was a law student at North Carolina Central University in 2022, when he took a job at an Amazon warehouse near the city of Raleigh to earn some extra cash.

The past month has been unlike any other during his three-year tenure at the company. Now, when he shows up for his shift at the shipping dock, Medelius-Marsano says he’s met with flyers and mounted TVs urging him to “vote no,” as well as QR codes on workstations that lead to an anti-union website. During meetings, managers discourage unionization.

The facility in the suburb of Garner, North Carolina, employs roughly 4,700 workers and is the site of Amazon’s latest labor showdown. Workers at the site are voting this week on whether to join Carolina Amazonians United for Solidarity (CAUSE), a grassroots union made up of current and former employees.

CAUSE organizers started the group in 2022 in an effort to boost wages and improve working conditions. Voting at the site, known as RDU1, wraps up on Saturday.

Workers at RDU1 and other facilities told CNBC that Amazon is increasingly using digital tools to deter employees from unionizing. That includes messaging through the company’s app and workstation computers. There’s also automated software and handheld package scanners used to track employee performance inside the warehouse, so the company knows when staffers are working or doing something else.

“You cannot get away from the anti-union propaganda or being surveilled, because when you walk into work they have cameras all over the building,” said Medelius-Marsano, who is an organizer with CAUSE. “You can’t get into work without scanning a badge or logging into a machine. That’s how they track you.”

CAUSE representatives have also made their pitch to RDU1 employees. The union has set up a “CAUSE HQ” tent across the street from the warehouse and disbursed leaflets in the facility’s break room.

Amazon, the nation’s second-largest private employer, has long sought to keep unions out of its ranks. The strategy succeeded in the U.S. until 2022, when workers at a Staten Island warehouse voted to join the Amazon Labor Union. Last month, workers at a Whole Foods store in Philadelphia voted to join the United Food and Commercial Workers union.

In December, Amazon delivery and warehouse workers at nine facilities went on strike, organized by the Teamsters, during the height of the holiday shopping season to push the company to the bargaining table. The strike ended on Christmas Eve.

Union elections at other Amazon warehouses in New York have finished in defeat in recent years, while the results of a union drive at an Alabama facility are being contested. Organizers have pointed to Amazon’s near-constant monitoring of employees as both a catalyst and a deterrent of union campaigns.

The NLRB has 343 open or settled unfair labor practice charges filed with the agency against Amazon, its subsidiaries and contracted delivery companies in the U.S., a spokesperson said. 

Amazon has argued in legal filings that the NLRB, which issues complaints against companies or unions determined to have violated labor law, is unconstitutional. Elon Musk’s SpaceX, Starbucks and Trader Joe’s have also made similar claims that challenge the agency’s authority.

Amazon spokeswoman Eileen Hards said the company’s employees can choose whether or not to join a union.

“We believe that both decisions should be equally protected which is why we talk openly, candidly and respectfully about these topics, actively sharing facts with employees so they can use that information to make an informed decision,” Hards said in a statement.

Hards said the company doesn’t retaliate against employees for union activities, and called claims that its employee monitoring discourages them from unionizing “odd.”

“The site is operating, so employees are still expected to perform their usual work,” Hards said in a statement. “Further, the camera technology in our facilities isn’t to surveil employees — it’s to help guide the flow of goods through the facilities and ensure security and safety of both employees and inventory.”

Orin Starn, a CAUSE organizer who was fired by Amazon early last year for violating the company’s drug and alcohol policy, called Amazon’s employee tracking “algorithmic management of labor.” Starn is an anthropology professor at Duke University who began working undercover at RDU1 in 2023 to conduct research for a book on Amazon.

“Where 100 years ago in a factory you would’ve had a supervisor come around to tell you if you’re slacking off, now in a modern warehouse like Amazon, you’re tracked digitally through a scanner,” Starn said.

John Logan, a professor and director of labor and employment studies at San Francisco State University, told CNBC in an email that Amazon has “perfected the weaponization” of technology, workplace surveillance and algorithmic management during anti-union campaigns “more than any other company.”

While Amazon may be more sophisticated than others, “the use of data analytics is becoming far more common in anti-union campaigns across the country,” Logan said. He added that it’s ”extremely common” for companies to try to improve working conditions or sweeten employee perks during a union drive.

Other academics are paying equally close attention to the issue. In a research paper published last week, Northwestern University PhD candidate Teke Wiggin explored Amazon’s use of algorithms and digital devices at the company’s BHM1 warehouse in Bessemer, Alabama.

“The black box and lack of accountability that comes with algorithmic management makes it harder for a worker or activist to decide if they’re being retaliated against,” Wiggin said in an interview. “Maybe their schedule changes a little bit, work feels harder than it used to, the employer can say that has nothing to do with us, that’s just the algorithm. But we have no idea if the algorithm has changed.”

Some Amazon employees see the situation differently. Storm Smith works at RDU1 as a process assistant, which involves monitoring worker productivity and safety. Amazon referred Smith to CNBC in the course of reporting this story.

Amazon’s workplace controls, like rate and time off task, are “part of the job,” Smith said. Staffers are “always welcome” to ask her what their rate is, she added.

“For my people, if I see your rate is not where it’s supposed to be, I’ll come up to you and say, ’Hey, this is your rate, are you feeling alright? Is there anything I could get you to get your rate up? Like a snack, a drink, whatever,” Smith said.

Wiggin interviewed 42 BHM1 employees following the first election in 2021, and reviewed NLRB records of hearings. The facility employed more than 5,800 workers at the time of the union drive.

The NLRB last November ordered a third union vote to be held at BHM1 after finding Amazon improperly interfered in two previous elections. The company has denied wrongdoing.

Amazon staffers told Wiggin that during the union campaign, the company tweaked some performance expectations to “improve working conditions” and dissuade them from unionizing. One employee said these changes were partly why he voted against the union, according to the study.

Workers at an Amazon warehouse outside St. Louis, Missouri, filed an NLRB complaint in May. The employees accused Amazon of using “intrusive algorithms” that track when they’re working to discourage them from organizing, The Guardian reported. The employees withdrew their complaint on Tuesday.

Hards said Amazon doesn’t require employees to meet specific productivity speeds or targets.

Lawmakers zeroed in on how surveillance can impact organizing efforts in recent years. In 2022, the former NLRB general counsel issued a memo calling for the group to address corporate use of “omnipresent surveillance and other algorithmic-management tools” to disrupt organizing efforts. The following year, the Biden Administration put out a request for information on automated worker surveillance and management, noting that the systems can pose risks to employees, including “their rights to form or join a labor union.”

However, the Trump administration is attempting to purge the NLRB, with the president firing the chair of the organization on his first day in office last month. Trump has put Musk, a notorious opponent of unions, in charge of the so-called Department of Government Efficiency, with the goal of cutting government costs and slashing regulations.

One of the most direct ways Amazon is able to disseminate anti-union messages is through the AtoZ app, which is an essential tool in their daily work.

The app is used by warehouse workers to access pay stubs and tax forms, request schedule changes or vacation time, post on the “Voice of the Associate” message board, and communicate with human resources.

Jennifer Bates, a prominent union organizer at BHM1, learned Amazon fired her through AtoZ in 2023. She was later reinstated by Amazon “after a full review of her case,” and provided backpay, Hards said.

The Retail, Wholesale and Department Store Union, which sought to represent BHM1 workers, has said the AtoZ app can access a user’s GPS, photos, camera, microphone and WiFi-connection information. The union also claims that “Amazon can sell the data collected to any third party companies and that data cannot be deleted.” The technology raises several concerns, including that it may suppress “the right to organize,” RWDSU said.

Hards said the RWDSU’s claims are inaccurate and denied that the company sells any data affiliated with AtoZ use. She said AtoZ users must give the app permission to access things like their GPS location.

At the Garner facility, the AtoZ app has been plastered with “anti-union propaganda” since the RDU1 election was announced last month, Medelius-Marsano said.

One AtoZ message suggested employees’ benefits could be at risk if they voted in a union, while another described CAUSE as an “outside party” that’s “claiming to be a union.”

RDU1 site leader Kristen Tettemer said in another message that a group like CAUSE “can get in the way of how we work together,” and that “once in, a union is very difficult to remove.” Smith said Amazon’s response to the union drive has been centered around “putting out the facts and telling you to do your research.”

Medelius-Marsano said it all amounts to an environment of intimidation.

“There’s no doubt about it,” Medelius-Marsano said. “If we lose, fear is going to be the reason.”