U.S. retailers hired more than 627,000 seasonal workers during the October-December 2010 holiday season, a welcome boost from the mere 231,000 seasonal workers put on in 2008. Prospects for 2011 seasonal hiring are not quite so rosy.
A number of large retailers have announced holiday hiring plans, including Target Stores (NYSE: TGT), which plans to hire more than 92,000, Macy’s (NYSE: M), which expects to hire 78,000 for its Bloomingdale’s and Macy’s stores, and Kohl’s (NYSE: KSS), which expects to hire more than 40,000 temporary employees. Both Macy’s and Kohl’s say that this year’s planned hirings are about 5% more than last year’s totals. Target’s planned hiring is slightly higher than last year’s pace. JCPenney (NYSE: JCP) expects to hire about 35,000 additional temporary workers this year.
On the downside, Best Buy (NYSE: BBY) has said it expects to hire about 15,000 seasonal workers, about half its 2010 total. Sears Holdings (NASDAQ: SHLD) and The TJX Companies (NYSE: TJX) are expecting seasonal hiring to be flat with last year. Privately held Toys “R” Us has plans to hire about 40,000 seasonal employees, down from 45,000 brought on a year ago.
The holiday season shopping forecast has softened since the early part of this year, with national retail sales expected to rise about 3%, down from initial projections of a 5% hike. Retailers also expect to see less foot traffic, which is forecast to fall by -2.2%.
The sales forecast has led about a quarter of U.S. retailers to cut back on their holiday season hiring. Another two-thirds are expecting hiring levels to be comparable with last year, and only about 10% expect to hire more employees than last year.
Lack of enthusiasm for adding new employees is likely due to higher costs, including higher rent, energy, and wholesale costs. The conservative approach to hiring could also be a reflection of general economic uncertainty in the U.S. Headlines about falling stock markets cause fear among consumers about job security and cash flow. And if the federal government appears to be tilted toward adopting an austerity package that includes more job losses, consumers could keep a much firmer grip on their wallets.
The stock market is down about -1.5% in the first 15 minutes of trading this morning, with Sears bucking the trend. Sears shares are up about 4.75%, at $59.97, in a 52-week range of $51.14-$94.79. Target shares are up about 1.4%, at $48.45, in a 52-week range of $45.28-$60.97. Shares of Macy’s are down about -1.7%, at $24.94, in a 52-week range of $21.69-$30.62. The SPDR S&P Retail ETF (NYSE: XRT) is down about -0.8%, at $44.09, in a 52-week range of $41.73-$56.44.
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