Due to higher prices and the labor market still tight, some U.S. retailers are scaling back their holiday season recruiting plans.
Macy’s Inc. and Dix Sporting Goods Inc. Became the latest retailer to do so on Monday, joining Walmart Inc in pulling back after rising prices for essential goods drove consumer spending away from purchases like clothing and TVs. Retail chains have announced hiring plans as holiday sales forecasts dim and Wall Street tries to figure out if retailers can meet the season’s demand, managing their costs. and get the products to the buyers on the shelves.
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The plans reflect slow economic trends. But some analysts and retailers also attributed the lower headcount figures to efforts to convert seasonal rents to permanent ones during last year’s holiday blitz.
Macy’s said in a statement Monday that it has improved retention from last year’s holiday season. Another analyst echoed that sentiment.
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“Hiring this holiday season is also likely to reflect that many of the seasonal workers from last year’s holiday period have become permanent employees,” Jack Kleinheng, chief economist at the industry group National Retail Federation, wrote in an email. ” “There is also some caution as the overall economy is growing at a much slower pace than in the same period last year.”
As of August, the retail business sector had added 422,300 jobs in the past 12 months, according to the US Bureau of Labor Statistics. But as retailers try to make the leap to vacation rentals, the labor market “still isn’t operating anywhere near as close to normal as it was before the pandemic,” according to Kleinheinz.
“It has become difficult to match job openings to available workers,” he said.
Nikki Baird, VP of strategy at retail technology company Aptos, said holiday hiring plans could also reflect a reset of expectations.
“There’s no point in setting unbreakable goals,” she said. “Retailers have had to lower their expectations of how many leisure workers they’re going to find realistically.”
Macy’s said it plans to hire people for more than 41,000 full- and part-time positions for the coming holiday season, as well as facilities at Bloomingdales, Bloomerkery locations, call centers and its supply chain. That’s down from the roughly 48,000 holiday season Messi said he had planned for the holidays about a year ago. Those works were part of a larger effort to create approximately 76,000 seasonal and permanent roles.
Meanwhile, Dix Sporting Goods said it plans to hire 9,000 seasonal workers for the holidays, down from 10,000 employed for last year’s holiday season.
In the meantime, to keep its hiring plans afloat for the holiday season, an outlier remained. Target announced last week that it wants to hire a “maximum” of 100,000 holiday season employees, and said it would launch new shopping deals in early October. For the holidays last year, Target also sought to rent 100,000. Seasonal worker.
Rival Walmart Inc. WMT,
Last week it announced plans to fill 40,000 vacation and full-time positions, far less than last year’s plan to hire 150,000 people for the holiday season. a representative for the retailer told the Wall Street Journal That it was more adequately employed than during the 2021 holiday season.
Retailers are gearing up for the holidays amid falling transportation costs and easing supply-chain bottlenecks. Tension in global supply chains last year prompted concerns about delays in holiday shipping as more customers, stuck at home, bought more things online. But this year analysts have become more concerned about whether retailers can manage products in their own warehouses, following a sharp shift in spending by Walmart and others on groceries, such as clothing. announced the dilution of the stockpile for
Some forecasters expect sales growth this holiday season. Analysts at Deloitte said this month they expect US holiday retail sales to grow between 4% and 6%, a slowdown from a 15.1% drop between November 2021 and January 2022, according to the US Census Bureau.
“Low projected growth for the 2022 holiday season reflects a slowdown in the economy this year,” Deloitte’s US economic forecaster Daniel Bachman said in a statement. “Retail sales are likely to be further impacted by the decline in demand for consumer durables, which was the focus of pandemic spending.”
He added that “inflation will also help increase dollar sales, although retailers will see a smaller increase in sales volume.”
Some analysts have suggested that issues with one-off merchandise from certain specialty retailers may clear up by October. But others have noted that inventory levels are still at record highs.
Macy’s, in a statement, showed little concern about employees going on vacation, arguing that hiring outlook has improved during the holiday season, partly by offering permanent employees higher average weekly hours. By doing
“This allowed us to support our regular associates, hire less seasonal associates of higher talent levels, and provide our workforce with more competitive pay and earning potential,” Macy’s said. “We also improved our seasonal associate retention during the holidays by actively converting seasonal associates into regular roles last year.”
Baird at Aptos also said that retailers have also taken steps to balance low staffing. If retailers become short of workers in warehouses, they can send more orders to stores, and vice versa. But as retailers try to ramp up their supply chains, there can be a mismatch between what’s in store and what customers want during the holidays, she said.
“Consumers will find that they have better options than in years past, because at least all the inventory that should have been here The last holiday is here now, ”she said. “It will still be a mismatch of ‘pandemic list’ versus post-pandemic shopping habits. Every expectation is that consumers are going to start holiday shopping more than ever before and be mindful of their budget.”
The stock rose 2% on Tuesday, near an 18-month low. Dix Sporting Goods DKS,
Gained 5.8%. Macy’s stock is down 41% this year, and Dick’s Sporting Goods is down 6% year over year. By comparison, the S&P 500 SPX,
23% lower in 2022.