Holiday Shopping 2013: Why Retail's Holiday Hiring Binge May Fall Short This Year

 @AlexCKaufman on September 23 2013 4:53 PM
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U.S. consumers may be doing more window-shopping than actual cash-spending this holiday season. REUTERS/Lisi Niesner

Retail hiring during the 2012 holiday season hit a 12-year high, but don’t expect the same figures this year, said employment consulting firm Challenger, Gray & Christmas, Inc.

In its annual holiday hiring forecast released on Monday, the firm estimates that retailers will hire fewer workers than last year’s 751,800, between Oct. 1 and Dec. 31. That was the heaviest hiring binge since 2000, when retailers added 788,200 to their payrolls for the final three months of the year.

So, why won’t 2013 meet – if not best – the previous year?

Look to consumer confidence metrics and the shift to online shopping, said John A. Challenger, the CEO of the outplacement firm.

“While the economy and job market are improving, it has now been four years since the recession officially ended, and millions of Americans are still unemployed or underemployed,” Challenger said in a statement. “As a result, consumers remain uneasy, which is evidenced by wide monthly mood swings in confidence surveys.”

September’s Thomson Reuters/University of Michigan poll, which gauges consumer sentiment monthly, found that confidence had slipped to its lowest levels since April – just one month after the number hit a six-year high.

“Such mood swings are not instilling a lot of optimism among those charged with reading the retail sales tea leaves,” Challenger, Gray & Christmas said in a press release.

Likewise, retail research firm ShopperTrak predicted that U.S. store sales will rise only 2.4 percent in November and December this year, compared with increases of 3 percent in 2012, 4 percent in 2011 and 3.8 percent in 2010.

“Price conscious consumers are doing more and more of their holiday shopping online, where they often find the best deals and can typically enjoy free delivery and no sales tax,” Challenger said. “The ongoing shift to Internet shopping could see some seasonal hiring in this area, but the numbers will never match the employment gains seen in traditional brick-and-mortar establishments.”

Amazon.com, Inc. (NASDAQ:AMZN) announced plans to hire 5,000 workers to meet the demands of the holiday season. This year, eBay Inc. (NASDAQ:EBAY) said it would bring on 2,000 workers and Eddie Bauer LLC promised to add 1,200 workers to an Ohio distribution center.

Compare that to the number of seasonal workers hired by big-box retailers with physical locations.

Kohl’s Corporation (NYSE:KSS) plans to add 53,000 workers this season. Target Corporation (NYSE:TGT) hoped for 70,000 new seasonal workers. Wal-Mart Stores Inc. (NYSE:WMT) plans to up its 2013 season hiring numbers 10 percent to about 55,000.

“Whether it is related to increase online shopping or the shakiness in consumer confidence, the expectation that there will be fewer people in the stores could prompt some retailers to reduce the number of extra people they need on the sales floor,” Challenger said.

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