Retail jobs have been shed due to a string of recent bankruptcies, which are heading toward their highest level since 2009. Meanwhile, the supply of brick-and-mortar stores outweighs demand, leading several major retailers like Macy's and Sears to announce widespread store closings in an effort to boost productivity.



The rapid growth of online shopping has also contributed to the industry's contraction, as has a shift in consumer spending toward things like travel and other services.



After a long dry spell, workers' wages began picking up in the last year. The latest monthly jobs data show the average weekly wage rose again, up 2.7 percent from a year ago.



But inflation has also begun to perk up, which creates another a headwind for retailers. Raising prices dampens demand, while holding the line cuts into profits.

"With inflation increasing at a similar pace (to wage growth), household spending power continues to go nowhere, and that is likely to restrain consumption going forward," said Naroff.