Retailers See Hope Heading into Holidays

Better-than-expected back-to-school sales results may lift the spirits of many retailers who were probably anticipating a bleak holiday season.
However, more optimism may not necessarily lead to increased seasonal hiring by cautious retailers, according to annual holiday hiring forecast released by Challenger, Gray & Christmas, Inc.
“Holiday hiring might improve slightly over last year, but only because 2008 saw the lowest seasonal employment growth in nearly 20 years. With millions of Americans out of work and many more simply cutting back on all discretionary spending, few retailers will take the risk of eating into slim profits with extra workers,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Job seekers should also be prepared to be on standby, he said.
Retailers are likely to conduct interviews now through October, then prepare a list of hirable candidates that they will call only when it becomes obvious that more manpower will be needed.
Last year, retail employment grew by just 384,300 from October through December, according to non-seasonally adjusted data from the Bureau of Labor Statistics. That was nearly 50 percent fewer than in 2007, when retailers added 720,800 workers during the holiday months.
The 384,300 seasonal workers hired in 2008 represent the lowest holiday hiring figure since 1989, when retailers added just 380,500 workers.
While there have been some signs that the recession may be over, conditions have remained dismal for retailers. As a result, employers in the sector have announced 89,242 job cuts through August, an 82 percent surge from the 48,971 retail job cuts recorded in the first eight months of 2008.
“However, there are some signs of hope,” said Challenger. “After heavy downsizing in the first quarter, job cuts in the retail sector slowed significantly in the second quarter and are on track to be even lower in the third quarter. Additionally, the latest data on retail sales were better than expected.”
The latest report from the Commerce Department shows that retail sales increased by 2.7 percent in August, after falling 0.2 percent in July. It was the biggest gain in three years. Much of the sales increase was due to robust car sales ignited by the government’s cash-for-clunkers program. However, other retail categories saw improvement, including apparel, up 2.4 percent; sporting goods, up 2.3 percent; and general merchandise, up 1.6 percent.
“The stronger sales figures heading into the holidays could boost seasonal hiring above last year’s meager activity. But the hiring surge may come later than normal this year, as many retailers wait to see how holiday sales are going before adding extra workers,” said Challenger.
“The good news for retailers is that if there is a need for late hiring, the labor pool is flush with qualified candidates who undoubtedly would be eager to earn some extra holiday spending money and take advantage of employee discounts,” said Challenger.
According to Challenger, the best opportunities for seasonal job seekers will be at the large discounters like Target and Wal-Mart, which will be heavily favored by cost-conscious consumers this holiday season. However, job seekers may have to look beyond the sales clerk positions for available spots.
“The big box stores need extra workers on the floor, but they also need extra workers in their shipping facilities and overnight stocking positions. Opportunities also exist outside of retail, in areas like catering and with shipping companies such as UPS and FedEx,” said Challenger.

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