The holiday shopping season is just around the corner and with it anxiety as to who is going to be laid off and unable to afford a holiday season buying spree, and who is going to be hired, even just temporarily, by stores during this year’s holiday season.
“The International Council of Shopping Centers (ICSC) forecasts that U.S. holiday sales in 2011 will post a moderate gain, though somewhat subdued relative to its prior year’s pace,” stated the ICSC in a recent press release.
There is no consensus among retailers, but there are many holiday season predictions and indexes, all striking a more positive note than those of the past three years. Despite economists’ gloomy forecast of another economic disaster, with some suggesting that a new recessionary period is in the offing and others claiming that America is already in a recessionary period, holiday sales won’t suffer another downturn if one can believe the upbeat forecasts.
“Although there are many statistics and surveys that convey the magnitude of holiday sales, the qualitative themes are more important than a ‘point estimate’ based on any specific metric,” said Michael P. Niemira, chief economist and vice president at ICSC, in the press release.
However, with the U.S. Census Bureau reporting in September lackluster August retail and services sales, being up only .5 percent for retail sales from August 2010, the outlook doesn’t seem to be rosy according to retail experts. Retailers will have to give goodies to the customer to make the products move.
“Retail CFOs are forecasting a 3% gain in sales for this year, according to BDO’s Retail Compass Survey. That is the most optimistic prediction since 2007. However CFOs are also expecting to have to offer last-minute markdowns to entice worried consumers to spend,” according to an entry on SmartBrief, a blog for shopping center industry executives.
Predicting Upbeat Holiday Spirit
“The economic and political risks are expected to be higher during the upcoming season than during 2010. But still, on balance, ICSC’s 2011 holiday sales forecast portrays a moderately healthy performance,” Niemira predicted.
ICSC predicts a 2.2 percent increase in November and December sales, compared to a 5 percent increase in 2010.
The ICSC Index of Chain Store Sales was at 140.3 in 2006, recording a 4.4 percent increase. In 2007, somehow the shopping mood was below 2006 levels, resulting in a 141.8 ICSC Index, increasing by a mere 1.1 percent.
2008 was the year the financial system went haywire and the economy contracted significantly. Therefore, the Index dropped by 5.6 percent from 2007 levels. Then, 2009 saw a 2.3 percent increase from 2008, and the Index went above pre-recession levels, increasing by 1.4 percent over the 2006 level.
In a nutshell, the majority of holiday spending will be for general merchandise, generating around $132 billion in sales; followed by the electronics and appliances sector, expected to sell $23.6 billion worth of merchandise; and lastly, the clothing and accessories sector, with around $19 billion in sales.
If the past foretells the future, earnings will be down, because of the cost of doing business.
“Even those chains that enjoyed stellar gains, such as Limited Brands, relied heavily on promotions—the company said merchandise margins were down compared to last year on cost pressures and promotions,” according to an Oct. 6 blog entry on the website of RetailSails, a retail research firm.
Holiday Hiring Predictions
“Holiday hiring at U.S. chain stores will rise by a modest 1 to 2 percent over the year-ago period, reflecting retailers’ expectations for sales,” said the ICSC in an October entry on its website.
Over the past 10 years, despite hard economic times, around 50 million people were hired for full- and part-time jobs during the two months before the Christmas holidays. Holiday hiring peaked in 2006.
Looking back across the years, seasonal hiring generally starts in October and can be counted on until the end of the year.
In 2007, actually considered to be a great year, 3.5 percent fewer workers were hired than in 2006. In 2010, the hiring improved significantly with 627,600 people being hired during the holiday season, a 26.6 percent increase from 2009.
“The retail environment has improved significantly since 2008, when the recession was at its worst. However, retailers are seeing several signs that consumer spending is dipping just as they are beginning to make decisions about how many workers to add for the upcoming holidays. This does not bode well for job seekers,” said John A. Challenger, CEO at Challenger, Gray & Christmas, an outplacement consulting firm, in a September press release.
Competition for jobs will be fierce given the U.S. unemployment situation, with the unemployment rate hovering around 9.1 percent over the past few months.
To beat the competition, job seekers need to network extensively, not make demands concerning working hours, dress appropriately, and apply for a job where they frequently shop.
“If there are certain retail outlets where you would prefer to work, start going there when business is slow and try to make a connection with a manager or assistant manager. The key is separating oneself from the pile of applicants,” Challenger said.
There might still be a chance to be offered a job down the road because retailers interview to look for the most qualified individuals and then start hiring when the shopping picks up. Many retailers may wait until the last minute to be sure they don’t hire any more people than they actually need.
“Job seekers should also be prepared to be on standby. … Retailers may conduct interviews in September and October and prepare a list of hirable candidates that they will call only when it becomes obvious that more manpower is needed,” Challenger said.
Next...U.S. Retailer Holiday Hiring Plans
U.S. Retailer Holiday Hiring Plans
Macy’s Inc. announced that it has already started hiring for sales support positions and intends to increase its temporary workforce by around 78,000 people for its Macy’s and Bloomingdale’s stores during this holiday season. This represents a 4 percent growth over 2010 hiring.
“We always hire aggressively during the holidays to ensure our customers are well-served in this important shopping period. We expect additional hiring this year given the continued sales growth in our business—both in-store and online,” said Terry J. Lundgren, CEO, chairman, and president at Macy’s Inc.
There is no increased hiring spree for Best Buy Co. Inc. this coming holiday season. Compared to 2010, it will cut its seasonal hiring by close to 50 percent to 15,000.
Focusing on its existing workforce, Best Buy’s management announced in a statement on its website, “This year we are focused on making sure that our most experienced, knowledgeable employees are there for our customers while also responding to our employees’ requests for additional hours for more income.”
Toys“R”Us Inc. began to hire some of its 40,000 seasonal employees before the end of September. It announced that its hiring goal is in line with prior year goals, and it generally will hire some of the seasonal employees into full-time positions.
“In fact, 10 percent of the 2010 holiday workforce is currently employed at Toys“R”Us. Substantial long-term growth opportunities exist for hardworking seasonal employees,” according to a September press release.
Kohl’s Department Stores Inc. will hire over 40,000 associates, about 5 percent more than in 2010, for its 1,127 stores nationwide this holiday season.
“We’re pleased to bring on more than 40,000 associates across the country this holiday season, following the thousands of jobs that were created this fall when we opened 30 new stores,” said John Worthington, chief administrative officer at Kohl’s, in recent press release.
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