Big Retailers Ramp Up Seasonal Hiring, But Will It Pay Off?

Toys R Us
Toys R Us

Toys R Us is the latest retailer planning to ramp up seasonal hiring this holiday.

But just-released sales forecasts on the busiest shopping season of the year raise the question: Will all those added store associates be kept busy?

The toy chain announced plans to sign on 45,000 seasonal employees to staff its stores and distribution centers for the winter holidays.

The number reflects an increase from the estimated 40,000 seasonal workers it hired last year, due in part to more positions needed to fulfill orders resulting from new initiatives, such as its "Buy Online, Pick Up In Store," "Ship from Store" and "Ship to Store" programs, as well as its new free layaway and Hot Toy Reservation services.

Meanwhile, Kohl's (KSS) set plans last week to hire 58,000 holiday employees, about two dozen more than it did in 2011, just as Wal-Mart (WMT) will sign up more than 50,000 workers, slightly up from last year, the company said.

But it remains to be seen if the staffing boost, with 36% of retailers planning to hire more than last holiday, will end up being warranted.

According to a Moody's Analytics (MCO) report released this week, U.S. retail sales in the fourth quarter will grow at the slowest pace since 2009.

"The 2012 holiday season will be a mild disappointment for U.S. retailers expecting significant growth in sales," Scott Hoyt, senior director of consumer economics for Moody's Analytics, said in the report.

"The numbers will rise but less vigorously than they did a year ago. Consumers are still strapped for cash, with a high unemployment rate and a large pool of workers who have left the labor force causing the growth of wage income to slip, even relative to modest employment gains," he said.

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Carl Steidtmann, Deloitte's chief economist, agreed, although the accounting firm has issued a more optimistic holiday sales outlook, forecasting a 3.5% to 4% lift in holiday sales over last year.

"Economic headwinds nagging consumers this fall include stubbornly high gasoline prices that continue to creep up and soft housing and job markets," Steidtmann said, in a statement.

Still, retailers are optimistic.

Retail consulting firm Kurt Salmon surveyed retail executives from a variety of store formats and sizes: More than half (56%) said their 2012 holiday sales will increase.


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