Despite the many economic headwinds still facing the U.S., much of the retail industry is anticipating a sharply improved holiday season compared to last year and is planning accordingly. Six of the largest store chains in America will together add more than 300,000 temporary workers during the season to account for the expected higher volume of shoppers. The National Retail Federation predicts that holiday sales this year will increase by 4.1% to $586.1 billion. After the severe damage the industry has suffered during the recession and its immediate aftermath, retail sales appear to be on the rise again.
Each year, large American retailers add tens of thousands of employees during the holidays. Such retailer include Wal-Mart Stores Inc. (NYSE: WMT), Target Corp. (NYSE: TGT), Toys“R”Us, and Macy’s Inc. (NYSE: M). These companies try to predict how well they will do months in advance in order to estimate how many more workers they will need to support the busiest shopping season. The announcements about temporary job additions usually come at the end of September.
Of course, despite the extensive advanced planning, retailers always run the risk their predictions will miss the mark. Shoppers may either stay away, or consumer activity may be better than expected. Stores do not want to be caught with too little or too much inventory or personnel. Excess inventory is sold off at low prices after year’s end. And those workers whose presence cannot be justified are laid off.
Large chains hire hundreds of thousands of people with the expectation that most won’t stay. Workers sign on because they need temp jobs. They often don’t have jobs at all and hope that a good holiday season will mean the temporary job can turn into a permanent one.
Several factors, however, may put a dent in the holiday shopping season. NRF President and CEO Matthew Shay warned that “the upcoming presidential election, confusion surrounding the ‘fiscal cliff’ and concern relating to future economic growth could all combine to affect consumers’ spending plans.” Despite these concerns, Shay remains bullish, stating that this year’s annual holiday forecast was the most optimistic one since the recession. “[O]verall we are optimistic that retailers promotions will hit the right chord with holiday shoppers,” Shay said.
The Tax Policy Center, however, predicted that the average tax increase per household will be almost $3,500 next year if all of the current tax cuts expire. If this further affects consumer spending, Shay may find his organization overestimated, and the gamble retailers’ took by hiring so many additional people may prove unsuccessful.
24/7 Wall St. looked at the holiday temporary hiring announcements of six huge retailers — Walmart, Target, Kohl’s Corp. (NYSE: KSS), Macy’s, Toys“R”Us and Gamestop Corp. (NYSE: GME). Together, they will add at least 324,700 temp workers. We also examined how many people the same retailers added last holiday season. We then looked at their revenues for the past two years as of July 2012 to see whether their overall retail prospects had improved or not. We also reviewed their total employee base to determine how large their temp job additions are in relation to their permanent payroll. SEC filings provided the sales and employment data.
These are the six companies hiring for the holidays.