Dive Brief:

• Employment at stores that sell food and beverages dropped by 26,000 in May compared to April, the third month in a row that the number of people working in the food retailing sector has fallen, the U.S. Bureau of Labor Statistics reported Friday.
• The decline contrasts with a sharp rise in employment at restaurants and bars, which added 186,000 positions in May, following similar increases in April and March, according to the government.
• ​Grocers are seeing their payrolls fall amid a call by the industry for the government to encourage people left jobless by the pandemic to return to the workforce.

Dive Insight:

The employment picture for grocery stores has changed markedly since the early weeks of the pandemic, when supermarkets rapidly hired restaurant workers left without jobs as lockdowns forced food-service establishments to shutter. Between March and May of last year, Kroger alone brought on more than 100,000 new employees.

Now, with the economy coming back to life and people returning to restaurants in droves, food retailers are facing a tough time meeting their labor requirements. The May reduction in the number of jobs at food and beverage stores followed losses of 47,000 positions in April and 2,000 in March, according to Bureau of Labor Statistics data. In February, the sector added 10,000 jobs.

In a reflection of the significant shifts occurring in the job market, the 186,000 jobs restaurants and bars tacked on in May was the largest of any sector. The figure was on top of 187,000 in April and 176,000 during the prior month.

The overall unemployment rate in the United States fell to 5.8% in May, down from 6.1% and a peak of 14.8% in April 2020. The labor force participation rate, meanwhile, stood at 61.6% last month, considerably below its level before the pandemic started but up from the lows recorded early in the COVID-19 crisis.

The challenging hiring landscape is placing stress on food retailers even as their year-over-year sales face downward pressure. For example, SpartanNash hosted a job fair at a store in Michigan last month that brought in only four candidates for 500 jobs offered by 60 employers, according to President and CEO Tony Sarsam.

"It is our intention to win in this war for talent, and SpartanNash is continuously renewing our compensation and benefits offering to help us attract new hires," Sarsam said during a June 3 earnings call.

On the other hand, Dollar General exceeded its goal of bringing on up to 20,000 workers during a hiring drive in April by 50%, Chief Operating Officer Jeff Owen said during a May 27 earnings call.