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It's not all blood on the streets for retailers: Some merchants are posting gains

  • Retailers including Macy's and J.C. Penney are struggling with shrinking sales
  • Home improvement and other sectors of the $400 billion industry are thriving

It's not all bad news in the retail industry.

Even as rising wages have helped prop up consumer spending, these are trying times for many of the industry's most powerful brands.

In malls across the country, shrinking sales have produced deeper losses and a historic wave of layoffs.

On Friday, J.C. Penney said losses widened in the first three months of 2017 to $180 million. The report came a day after Macy's reported that profits continue to spiral downward, dropping 38 percent in the latest quarter compared with a year ago. In February, Macy's raised its ongoing store closing plans to include about 100 locations as it struggles to stay afloat.

But while the outlook for department stores appears bleak, there are major retail sectors that are seeing brisk growth as American consumer spending continues to undergo a major transition.

The biggest winner, of course, is the "nonstore" category that includes online retailers like Amazon. That sector's growth has largely come at the expense of the general merchandisers who are seeing their mall traffic dry up.

But nonstore retailing still makes up a relatively small share — about 10 percent — of the more than $400 billion in annual retail sales.

And some retailers are much less vulnerable to the shift online. Gasoline stations saw sales jump more than 12 percent in the last year, in part because of a rebound in gasoline prices.

Retailers of building materials and garden supplies have benefited in the last year from a strong housing market.

Until recently, car dealers enjoyed steady sales. But vehicle sales have flattened in the last few months. Sluggish sales are prompting dealers to cut prices and offer cash back promotions to lure customers to their showrooms.

The shift in sales patterns has also led to changes in hiring among merchants.

The number of nonstore jobs is up nearly 10 percent in the last year, as ecommerce continues to expand its reach. Those numbers don't include additional hiring in warehouses and trucking companies that have accompanied the growth of online retail.

Overall, retailers steadily expanded payrolls during the recovery from the Great Recession, but that expansion has stalled since the beginning of the year.

The slowdown reflects the consolidation underway in the sectors that have lost sales, including sporting foods, electronics, clothing and general merchandise.

Watch: Goolsbee on traditional retail's issues