Horror show just won’t end for Macy’s and Nordstrom

Amazon revealed that it had 541,900 employees in the third quarter, up from a little more than 300,000 in the same period a year earlier.

Wall Street is bracing for more signs of the retail apocalypse this week when Macy’s and Nordstrom detail the latest pain from the loss of mall shoppers who’ve migrated online.

Worse than slumping sales, department stores are likely to paint a gloomy picture about their busiest and most critical time of the year. Morgan Stanley recently warned that sales will outright decline during the holiday quarter at both Macy’s and Nordstrom.

The obvious reason for shrinking sales is that fewer and fewer Americans are heading to the malls to do their Christmas shopping. Instead of battling the crowds, they’re finding great deals and more convenience on Amazon and elsewhere online.

Not only is online shopping growing more popular, but Amazon is becoming an increasingly-powerful player, despite serious efforts by Walmart and other traditional retailers to catch up. Boosted by innovations like Alexa and its Dash buttons, Amazon is expected to capture 35% of total e-commerce sales during the fourth quarter, according to Morgan Stanley. That’s up from about 20% in early 2016.

Amazon has become such a dominant player that Morgan Stanley estimates it accounts for half of all U.S. retail growth, up from just 17% in 2013. No wonder why investors are fleeing department stores and flocking to Amazon, whose stock is up 48% this year. Macy’s stock is down by almost exactly the same amount, while Nordstrom is off by 20%.

The environment is so bleak right now for brick-and-mortar retailers that Nordstrom has suspended its efforts to go private. The department store had hoped to reinvent itself to avoid the harsh scrutiny of Wall Street, but financing dried up following the Toys ‘R’ Us bankruptcy.

Nearly 7,000 stores have already closed this year, taking out the previous record set during the 2008 financial crisis. That trend may not be done yet.