Mapping Retail Labor Costs and Workforce Availability

Customer analytics has transformed retail site selection. By analyzing demographics, psychographics, consumer spending, and existing customer locations, retailers can identify markets where their target customers are most likely to shop.

However, identifying the right customers is only half of the equation. A market may perfectly match a retailer's customer profile, but if labor costs are significantly above average or the available retail workforce is limited, operating a successful store becomes much more difficult. Staffing shortages can increase labor costs, reduce customer service levels, limit operating hours, and ultimately affect profitability.

As labor markets continue to tighten across many parts of the country, retailers should evaluate workforce characteristics alongside customer demand before making expansion decisions.

Customer Analytics Should Be Balanced with Workforce Analytics

Most retail site selection strategies begin by answering questions such as:

• Where do our best customers live? 
• Which markets contain our target demographic? 
• Where are consumer spending levels strongest? 
• Which psychographic segments best align with our brand? 

These questions remain essential. But equally important are workforce questions:

• Can we recruit enough qualified employees? 
• How competitive is the labor market? 
• What wages will be required to attract talent? 
• Will turnover become a long-term operational challenge? 

Ignoring these workforce considerations can result in stores that generate strong sales but struggle operationally because they cannot consistently recruit and retain employees. Retail success depends on having both the right customers and the right workforce.

Measuring Workforce Strength

For this analysis, we evaluated the 250 largest metropolitan areas by population in the United States using two broad workforce metrics:

• Retail associate average salary as a proxy for labor cost 
• Retail salesperson employment as a proxy for labor availability 

However, these rankings should be viewed as a starting point—not the final answer. Every retail concept has unique workforce requirements; although a luxury jewelry retailer, outdoor recreation brand, grocery chain, home improvement retailer, or specialty retailer may all hire under the broad retail salesperson occupation, each may require different levels of product knowledge, sales ability, technical expertise, customer service skills, and management experience.

Similarly, compensation strategies vary widely. Utilizing salary data for retail associates provides a great baseline proxy, but some retailers compete primarily on hourly wages, while others rely on commissions, bonuses, or premium pay to attract experienced employees.

For these reasons, retailers should move beyond broad occupational data during the final stages of site selection. However, for the purposes of this analysis, and identifying the most favorable workforce markets across the U.S., the two variables provided in this analysis offer a good baseline for market comparison.

The Most Favorable Workforce Markets

Using data from the 250 largest metropolitan areas, we ranked markets based on the combination of lower retail associate average salary and higher retail salesperson employment. These metro areas generally offer retailers a favorable balance of lower operating costs and deeper retail labor pools.

Top 15 Metro Areas: Lower Retail Labor Cost + Higher Retail Workforce

The Most Challenging Workforce Markets

At the opposite end of the spectrum are metro areas that combine relatively higher labor costs with smaller retail labor pools, potentially creating greater hiring challenges.

Bottom 15 Metro Areas: Higher Retail Labor Cost + Lower Retail Workforce

Explore All 250 Metro Areas with the Interactive Workforce Map

While the Top 15 and Bottom 15 rankings highlight markets with the strongest and weakest workforce fundamentals, every retailer's expansion strategy is unique.

To help retailers evaluate markets based on their own priorities, we've also developed an interactive map of all 250 metropolitan areas included in this analysis. The map allows users to visualize and compare retail labor conditions across the country using two key workforce metrics:

• Retail associate average salary 
• Retail salesperson employment 

Users can sort, filter, and compare metro areas to identify markets that best align with their workforce strategy. Whether evaluating a single region or screening opportunities nationwide, the interactive map provides an easy way to explore labor cost and labor availability across the largest U.S. retail markets.

Key Workforce Trends

Several interesting patterns emerge from the analysis.

• Texas stands out as one of the strongest workforce regions, with multiple metro areas combining competitive wages and deep retail labor pools. 
• The Southeast also performs exceptionally well. South Carolina, Tennessee, Alabama, Mississippi, Louisiana, Florida, and portions of the Midwest appear repeatedly among the strongest workforce markets.
• Meanwhile, California represents the largest concentration of higher-cost workforce markets, with several metros appearing among the least favorable rankings. Washington also contains several metros characterized by relatively high wages and more limited labor availability.

Overall, the analysis suggests that many Southern and Midwestern metropolitan areas continue to offer retailers the strongest combination of affordable labor and workforce availability, while many West Coast markets present the potential for greater staffing challenges due to higher wage rates and tighter labor markets.

Workforce Analytics Should Evolve Throughout the Site Selection Process

Broad labor statistics are extremely valuable for screening hundreds of markets. However, as retailers narrow their search from hundreds of metro areas to a handful of finalists, workforce analysis should become increasingly tailored to the retailer's specific operating model.

This may include evaluating:

• Occupations beyond retail salespersons 
• Experience requirements 
• Full-time versus part-time staffing 
• Seasonal hiring needs 
• Bilingual workforce availability 
• Sales management talent 
• Distribution and fulfillment labor 
• Competitive employers hiring from the same talent pool 

The closer the labor analysis reflects the retailer's actual hiring profile, the more reliable the site selection decision becomes.

Conclusion

Customer analytics remains one of the most powerful tools in retail site selection. Understanding where customers live and how they shop is fundamental to identifying attractive expansion opportunities. But customers alone do not operate stores. The ability to recruit and retain qualified employees at sustainable wage levels is equally important to long-term success.

Our analysis of the 250 largest U.S. metropolitan areas demonstrates that significant differences exist in retail labor cost and labor availability across the country. While broad workforce measures provide an excellent foundation for comparing markets, retailers should refine their analysis by aligning occupations, experience requirements, and compensation strategies with their own hiring needs before making final location decisions.

The most successful retail expansion strategies balance customer analytics, workforce analytics, real estate, and competitive dynamics to identify locations that support sustainable growth for years to come.

Contact us to learn how we can help you optimize your retail footprint in 2026 and beyond.