Rising gas prices and fear of the fiscal cliff aren’t expected to make a substantial dent in holiday sales — or holiday hiring — this year.
In the first of a series of projections from various industry groups, ShopperTrak, the Chicago-based firm that measures traffic and transactions in more than 50,000 retail locations worldwide, said it expects U.S. sales for the critical November-to-December period to rise 3.3 percent over 2011 levels, with apparel and accessories sales rising a more robust 4 percent. Foot traffic is expected to grow 2.8 percent overall and 3.5 percent in the apparel sector.
Last year, holiday foot traffic declined 2.2 percent as GAFO (general merchandise, apparel, furniture and related merchandise) sales rose 3.7 percent, higher than ShopperTrak’s prediction of a 3 percent holiday bump. GAFO sales totaled $251.3 billion for the season.
“We’re expecting the first increase in foot traffic at retail since holiday of 2007,” said Bill Martin, founder of ShopperTrak. “The traffic numbers have been trending upward since February and this will be crucial this year. It will give retailers more of a chance to convert browsers into buyers and, if they do their jobs well, into fans and advocates.”
E-commerce, he noted, will play a larger role in drawing consumers to malls and into individual stores. “Stores that are thinking along omnichannel lines and acting on them will outdistance their competitors,” Martin said. “Technology is starting to play a larger role in helping companies deliver on their brand promise.”
Still, e-commerce is likely to account for less than 10 percent of overall sales during the season, even after peaking at about 8 percent in the final months of 2011.
Martin said that the possibility of dramatically higher gas prices and the approach of the so-called fiscal cliff were included in the company’s projections for the year. He said that, if this year follows the pattern of previous presidential election years, sales will slow just prior to the election but likely make up lost ground after a president is elected. “Stores should consider the possibility of a pre-election drop-off in their scheduling of staff,” he said.
Other factors should work in stores’ favor, including the basic layout of the calendar, with the maximum number of days, 32, between Black Friday and Christmas and a full weekend just prior to Christmas, which falls on a Tuesday. Additionally, Hanukkah begins on Dec. 8, 12 days earlier than it did in 2011.
On the jobs front, global management consulting firm Hay Group said three-fourths of the retailers it surveyed in a September study forecast an increase in holiday sales this year, with 36 percent saying they plan to hire more seasonal workers.
Craig Rowley, vice president and global practice leader for Hay’s retail group, said, “After four years of economic turbulence, they have figured out how to operate in an uncertain business environment and are calm and cool, knowing that they are ready, as they head into the holidays.”
The survey of 14 retailers, including Ann Inc., Hot Topic and Chico’s FAS, indicated that about 57 percent plan to hire seasonal workers at the same level as last year. What’s new is that 36 percent said they will be hiring more, compared with just 10 percent who said the same thing when they were polled last year.
The survey found that retailers have also adjusted their e-commerce strategy, with fulfillment centers ready for the holiday onslaught without the need for significant staffing adjustments due to strategy changes throughout the year. Hay Group said that 74 percent said their seasonal hires will be in stores, with 12 percent for distribution centers.
Perhaps more importantly, the respondents also said they are increasing their focus on permanent employees, with 43 percent saying they will have more permanent workers and fewer seasonal workers. “With renewed confidence and a bullish outlook for 2013, retailers want to retain more workers beyond the holiday season,” Hay Group concluded.
As for promotions, 31 percent said they will start even earlier this year. While 58 percent said they will wait until Black Friday, 42 percent of the respondents said they will begin promotions in October. Of the promotional plans, only 18 percent said they felt pressure to match online-only prices. And an even smaller percentage — at 8 percent — said they will be open 24 hours on select days throughout the holiday season.