Macy’s Inc. is boosting its seasonal hiring in anticipation of higher sales this holiday, and a series of studies indicates that many retailers expect to follow the same pattern.
This story first appeared in the September 24, 2010 issue of WWD. Subscribe Today.
Still, the surveys — by outplacement consultants Challenger, Gray & Christmas Inc.; management consultants Hay Group Inc. and finance giant CIT Group Inc. — didn’t suggest that seasonal jobs would return to their pre-recession levels.
Macy’s said Thursday that it would add 65,000 seasonal workers to staff its stores, call centers and distribution centers this year, a slight increase from the past given that it expects same-store sales to rise 3 percent to 3.5 percent in the back half of its fiscal year.
The Challenger report said increases in retail sales in the past two months will lead to more hiring for holiday than in the past two years, “but it probably will not achieve the levels we saw in 2006 or 2007 when retailers’ holiday payrolls grew by 746,800 and 720,800, respectively,” said John Challenger, chief executive officer of the firm. “There is still a lot of doubt about the sustainability of this economy.”
Because “retailers do not want to be caught with too many workers at a time when many of the fundamentals needed for strong consumer spending remain a little shaky,” they will be restrained in their employment practices but still above the 501,400 additions to payrolls registered for holiday 2009 and the 384,300 put on the prior year, when the number hit a 22-year low, according to data from the Bureau of Labor Statistics.
Challenger did see some cause for optimism, including a 65 percent reduction in job-cut announcements from a year ago and a pickup of 329,400 jobs since February.
Recent increases in sales, especially in apparel, will add to demand for holiday help, but, like many purchases, additions will come late, possibly in “November and December, as retailers wait to see how holiday sales are going before adding extra workers,” Challenger said.
According to the CIT study, 68 percent of retailers expect to hire more workers this holiday season than they did for holiday 2009. And while 72 percent said they expect to discount more this year than a year ago, 68 percent of retailers also said they expect revenues to grow over the next 12 months.
Burt Feinberg, managing director and group head of retail finance at CIT, said, “The general consensus is that, having weathered the economic downturn, most retailers are in better shape today than in 2009 and have positioned themselves well to meet future consumer demand when it returns.”
CIT polled middle-market retailers with annual revenues of between $25 million and $1 billion.
In the Hay Group study, which included input from 20 major retailers including J.C. Penney Co. Inc. and Abercrombie & Fitch Co., 83 percent of the retailers said they plan to hire more or the same number of workers for the season, with 61 percent hiring about the same and 22 percent employing anywhere from 5 to 15 percent more to meet their holiday needs. Exactly one-quarter said they would pay seasonal workers less than permanent staff, down from 33 percent a year ago.
Just 17 percent expect to cut staffing this holiday, down from 40 percent in the 2009 study.
Sixty-four percent of the retailers expect a sales increase this holiday, versus just 28 percent a year ago, and 35 percent expect that increase to land between 6 and 15 percent. None of the participating stores expect a sales decrease versus 36 percent who entered the season expecting top-line declines in 2009.
Earlier this week, Deloitte LLP forecast 2.2 percent growth in holiday sales this year, to $852 billion, excluding automobiles and gasoline. Led by e-commerce, nonstore sales are seen ballooning 15 percent.