Stores Plan Increased Hiring While Offering Increasingly Large Discounts

Is increased retail hiring on the back of rising holiday expectations consistent with deep, deep, merchandise discounts?

While pondering that question, note the expected seasonal hiring ramp at numerous stores including Best Buy, Macy’s, Kohl’s, Toys R Us, Pier 1, American Eagle Outfitters and Borders.

Best Buy to hire 2,000 seasonal staff for holidays

The Star reports Best Buy to hire 2,000 seasonal staff for holidaysElectronics retailer Best Buy says it will hire 2,000 seasonal workers across Canada for the hectic holiday shopping season.

Retailers have been increasing their staff numbers in recent weeks in preparation for the holidays, an encouraging sign that many expect brisk sales.

Earlier this month Toys R Us said it would double it workforce by hiring 45,000 seasonal employees in the United States.Stores say they’ll hire more temporary holiday workers

Please consider Stores say they’ll hire more temporary holiday workers
The holiday hiring picture looks a bit merrier this year.

Macy’s, Kohl’s, Toys R Us, Pier 1, American Eagle Outfitters and Borders — all stores with existing or soon-to-open outlets in Reno-Sparks — plan to hire more temporary holiday workers this year than last, emboldened by several months of sales gains and a slowly improving economy.

The jobs probably won’t be enough to be a dent in the nation’s nearly 10 percent unemployment rate, but for Americans desperate for some work, they’re far more than an early Christmas present.

Kohl’s, which opened a new store in Carson City in September, couldn’t provide the exact number of holiday positions it plans to add in its Northern Nevada stores. The company announced that it will hire more than 40,000 associates this holiday season for its various operations — an increase of more than 20 percent from last year.

“We consider … specific (store hiring) numbers proprietary information,” said Elizabeth Deluca, a Kohl’s spokeswoman. “However, on average, Kohl’s anticipates hiring an average of 35 associates per store for the holiday season.”

Jobs nationwide

Retailers will add between 550,000 and 650,000 jobs this holiday season, according to an updated forecast from the national outsourcing firm Challenger, Gray and Christmas, said spokesman James Pedderson. That’s significantly more than the 501,400 added last year. But it’s still well below the 720,800 added in 2007, just before the recession began.

Toys R Us, for example is hiring 10,000 more seasonal workers than last year to staff 600 temporary stores it’s opening for the holidays. Many of those stores are in shopping malls that were left without toy stores after KB Toys went out of business in 2008.

Others are making more modest adjustments. Macy’s last week said it was increasing seasonal hiring slightly to about 65,000 because it expects better holiday revenue than last year, though it wouldn’t specify how many more it was.

Pier 1, American Eagle and Borders also said they are slightly increasing their seasonal staff this year. Other big chains, including Wal-Mart Stores Inc. and Best Buy Co., expect hiring to be flat.Easy Comparisons

Some of these hiring numbers sound remarkably high on the surface, but compared to 2007, seasonal hiring will be down between 10% and 24%.

I will hazard a guess we will see something towards the low end of expectations.

When 50 Percent Off Just Won’t Do

Inquiring minds just might be interested in what it takes to lure shoppers. The New York Times has the answer in When 50 Percent Off Just Won’t Do
Campaigns for stores, from giant chains to mom-and-pops, are promoting sales that are frequently expressed in percentages off from regular prices. Twenty or 25 percent off, once considered a hefty discount, is practically nothing nowadays, as most consumers must be enticed further to open their wallets or purses.

How willing shoppers are to shop is important as retailers approach the start of the crucial Christmas season. To prime the pump, ads are routinely proclaiming savings of 50, 60 and even 70 percent off. In some instances, the discounts are going as high as 85 percent.

Some retailers are subtracting atop subtraction by offering an “extra” percentage off merchandise, typically items that had been marked down earlier.

For instance, Bloomingdale’s, part of Macy’s Inc., promoted in newspaper ads on Sunday “an extra 30 percent-40 percent off” the reduced prices on clothing, handbags, accessories and jewelry for “a total savings of 40 percent-75 percent off original prices.”

The Macy’s division, not to be outdone, advertised in circulars a “fashion clearance” with “an extra 40 percent off already reduced prices for a total savings of 50 percent-80 percent off original prices.” That was along with a clearance on home goods with an additional 30 percent off the previously cut prices “for a total savings of 40 percent-75 percent off original prices.” Returning to the opening question it appears that the seasonal hiring increase is actually weak historically, and stores have to offer ever increasing bargains to lure customers.

This should help put the much ballyhooed seasoning hiring ramp into better perspective.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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