Wal-Mart and other retailers say they are boosting holiday hiring this year as they prep of what they hope will be a rosier shopping season.
The ramp-up in temporary hiring could hit more than 800,000 workers in the last months of the year, the highest level since 1999, according to career counseling firm Challenger, Gray & Christmas Inc.
“The last two years saw hiring return to pre-recession levels,” said John Challenger, chief executive of the company. “This year, we could see hiring return to levels not seen since the height of the dot-com boom.”
The planned hires indicate retailers are expecting a decent but not blockbuster holiday season, a crucial period in which they can bring in as much as 40% of their total annual sales, observers said. Retail sales are also considered a bellwether of consumer spending, which makes up two-thirds of U.S. economic activity.
Wal-Mart Stores Inc. announced plans Thursday to hire 60,000 seasonal workers, including up to 5,000 in Southern California. That’s nearly 10% more than the retail giant brought on board last year. The chain has previously said it would keep all its cash registers open at more than 3,800 stores during peak shopping hours from Thanksgiving through Christmas.
Crystal Garcia, a Wal-Mart store manager in West Covina, said many customers had already used the chain’s holiday layaway option, which was rolled out Sept. 12. It is the fourth straight year the chain is offering such a service.
“It’s actually doing really great,” Garcia said. “We have been getting a lot of high-ticket items like PS4s and Xboxes put on layaway, as well as a lot of toys.”
Other companies are also increasing their holiday staff.
Kohl’s said it would hire more than 67,000 employees to staff its stores, up from about 50,000 last year. FedEx is upping its holiday hiring 25% to 50,000, while UPS said it would add 95,000 seasonal workers, nearly double from last year.
Analysts say falling gas prices and an improved job market have brightened consumers’ financial outlook. But many said stagnant incomes will keep people from spending lavishly for presents this year.
Nearly 70% of Americans say they will spend the same as last year during the holidays, and 16% said they planned to spend less, according to Bob Shullman, chief executive of the Shullman Research Center. Only 13% planned to dig deeper into their wallets and splurge more compared with last year.
About half of those surveyed plan to spend less than $500. An additional 19% said they will spend between $500 and $750.
“If we can do as well as we did last year, it will be a good thing,” Shullman said. “There is quite a bit of anxiety in the world.”
Slow sales in the first half of 2014 prompted the National Retail Federation to drop its annual sales forecast to 3.6%, down from a previous estimate of 4.1%. The trade group hasn’t issued its holiday forecast.
Last year, retail sales in November and December rose 3.8% from a year earlier as consumers spent $601.8 billion at stores and websites, the group said.
Observers said delivery companies such as FedEx may not actually be expecting big growth in business this year but want to avoid a repeat of last year’s staffing problems.
Both UPS and FedEx were heavily criticized in 2013 after failing to deliver some packages before Christmas amid an Internet shopping surge. UPS and Amazon.com ended up offering refunds to customers who did not get their orders in time.
“People are less likely to trudge to brick-and-mortar stores. They are shopping online,” Shullman said. “FedEx and UPS just didn’t have enough people last year.”
Customers who choose to shop from their laptops and smartphones will help drive down the need for workers at stores and malls during the holidays, analysts said.
Challenger said Target slashed its hiring 20% last year “due in part to more online shopping.” Target hasn’t revealed its 2014 holiday hiring plans yet.
But such cuts are balanced out by e-commerce heavyweights like Amazon that bring on extra workers during the winter months, Challenger said.