Dive Brief:
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Macy’s and the Retail, Wholesale and Department Store Union worked overnight Wednesday to negotiate a deal and avoid a planned strike at the retailer's flagship Herald Square store in New York.
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The union, which represents 5,000 workers, including 3,500 from the store, said the talks centered around employees health care insurance, work schedules including at the holidays, and pension plans.
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A Thursday morning Facebook post on the Local 1-S Macy's Workers page said, “The Committee of negotiations and the company have come to an agreement. Everyone should report to their work in their regular schedule.” Earlier the agreement had been described as “tentative.”
Dive Insight:
Because they are unionized, Macy’s workers already enjoy higher wages, better benefits, and more predictable work schedules than many other retail employees in the U.S. The store hasn't had a strike since 1972, but Macy's was preparing for a walk out days before negotiations, placing out full page ads in New York newspapers for temporary sales positions "in anticipation of a possible labor dispute," according to Fortune.
The news comes as many retailers are reevaluating the importance of skilled and highly trained workers at their physical locations, especially at a time when it may be easier for customers to order online than head into a store.
Wal-Mart, acknowledging the difficulty of retaining top talent and the cost of employee turnover, announced last year that it was increasing its starting pay and offering fixed scheduling to employees. Meanwhile, lawmakers in cities, states, and even Congress are passing or considering minimum wage hikes and laws against chaotic scheduling. A recent New York Times feature also found that liberalized return policies are reducing sales commissions, especially at department stores like Macy's.
The threat of a strike came as Macy’s is struggling to figure out how to run a department store in an era of e-commerce growth, shifting consumer tastes, and a more urban younger population.
Last month the retailer reported a sales decrease of 7.4%, due mostly to its 41 store closures last year. Same-store sales on an owned plus licensed basis fell 5.6% and on an owned basis dropped 6.1%, the fifth straight quarterly decline. Macy's EPS beat expectations, but the company alarmed Wall Street when it lowered its full fiscal year guidance.