California shoppers are tightening their belts, and retailers are adjusting their staffing in response.

My analysis, based on two years of retail sales data from the Census Bureau and hiring trends tracked by the Employment Development Department, reveals that financial worries are growing. California consumer confidence has hit a four-year low, impacting sales at many shopping centers.

The retail landscape has been turbulent. While there was a surge in shopping after pandemic lockdowns, this was followed by a decline for some retailers. High inflation and interest rates have made bargain hunting more prevalent.

For the first five months of this year, retail spending in California (excluding online shopping) increased at just a 1.2% annual rate, a slight improvement from last year’s 0.2% increase but a stark contrast to the 9% rise in early 2022 when pandemic restrictions were lifted.

Consequently, retail hiring in California has become more cautious. The number of retail workers has decreased by 4,600 jobs, or 0.3%, since early 2022.

A closer look at spending and hiring trends by category shows varied results:

• Home Furnishings: Sales are down 9.7% this year after a modest increase last year, with jobs dropping by 13% in two years.
• Sporting Goods/Hobby/Music: Sales fell 3.5% this year, with jobs decreasing by 4% in two years.
• Gas Stations: Sales dropped 3.1% this year, mirroring last year’s 16% decline, but jobs increased by 5% as convenience store operations expanded.
• Car Dealers: Sales flattened this year after a previous increase, with staffing up by 0.6% as more shoppers visit showrooms.
• Building/Garden Supplies: Sales rose slightly by 0.7% this year, but jobs fell by 4% over two years.
• Electronics/Appliances: Sales are up 1.7% this year, but jobs decreased by 13% in two years.
• Food and Beverage: Sales rose 2.7% this year, with a 4% increase in staffing as competition intensifies.
• Clothing/Jewelry: Sales are up 3.2% this year, and staffing has increased by 0.9%.
• Miscellaneous Retailers: Sales surged 3.2%, following a 12% increase last year, with jobs rising by 1%.
• General Merchandise: Sales increased 3.5% this year, with minimal job growth.
• Health/Personal Care: Sales rose 3.9%, but jobs fell by 2% as competition in the prescription market intensifies.

In conclusion, California’s retail growth mirrors national trends, with the state’s 1.2% increase aligning with the national average. Regions like the Northeast have seen higher gains, while states in the Midwest have experienced declines.