Published: November 21, 2008 01:27 pm      

Retail industry prepares for rough holiday season

Companies bracing for poor sales, not hiring as many seasonal workers this year

Retailers are bracing for the worst holiday shopping season in years, and that means seasonal jobs are harder to find.

The Purdue Retail Institute predicts this could be the worst retail Christmas season in more than 15 years. It may hit Indiana stores even harder with higher-than-average unemployment rates, according to its forecast.

Richard Feinberg, a researcher with the Purdue Retail Institute, expects most companies to sell just as much or less than they did during last year’s holiday season.

“Companies that do 1 percent better than they did last year should be thankful ... and that is just disastrous, because it doesn’t even keep up with inflation,” Feinberg said.

He also expects stores to hire drastically fewer seasonal employees as they wait to see how sales are going.

Many large retailers do not release how many temporary employees they hire, but most of those who have are expecting a reduction. Wal-Mart plans to hire between 20,000 and 25,000 temporary employees between October and December. They will not say how many they hired last year.

Best Buy has hired 21,000 seasonal employees this year, compared to 26,500 last year, spokeswoman Dawn Bryant said. The company has received more than 1 million applications.

“We’re watching our expenses, and our store managers are deciding what’s best for their individual stores,” she said.

George Whalin, a California-based retail expert and consultant, said one of the first things companies do when trying to cut costs is to hire fewer seasonal employees or have them work fewer hours.

The economic slump is hitting high-end retailers the hardest, Whalin said, meaning stores such as Costco and Wal-Mart may do better than others. Feinberg agreed that stores with cheaper prices will benefit.

“People go to the places they know they’ll save the best,” he said. “That doesn’t mean they’re going to do well, just better than others.”

Feinberg said all regions of the country will be affected by low-shopping numbers. The one retail area that may see improvement is online shipping. Feinberg expects Internet retailers to do about 15 percent better than last year.

Part of the reason for the dour outlook for overall retail is recent consumer spending reports.

“We’ve had two really bad months,” Whalin said.

Retail sales dropped 2.8 percent from September to October after dropping 2.4 percent the previous month, according to a report from the Department of Commerce.

SnagAJob.com did a national survey of hourly hiring managers and found they expect to hire about one-third fewer seasonal workers than last year. And about 40 percent of hiring managers expected more applications than last year.

The picture was even worse in the Midwest, where managers planned to hire, on average, 2.9 workers this year, compared to 6.2 last year.

That does not mean there are no jobs left. The Web site still has seasonal listings in the Jeffersonville area for United Parcel Service, WIS International, Toys ‘R’ Us and Wal-Mart.

Many retailers have finished hiring for the season, so third-party inventory companies, shipping companies, movie theaters and pizza restaurants that deliver are good places to look for a job this time of year, said Cathy McCarthy, senior vice president of marketing for SnagAJob.com.

“There are still jobs out there, but we would encourage job seekers to be extremely persistent and flexible,” McCarthy said.

Job seekers can expect continued struggles in 2009 as well.

“This is not only for seasonal hiring,” Feinberg said. “If in fact we’re right, they’re going to cut back hiring for all of next year. It’s going to be a ripple effect for the whole year.”

Much like many retailers this year, Whalin is taking a wait-and-see approach with the economy.

“We’re in an unprecedented situation,” Whalin said. “We’re in a time that it’s hard to be accurate making predictions.”



Did you know?

• One-third of consumers buy items the last week before Christmas.

• The busiest shopping day of the year is usually the Saturday or Sunday before Christmas.

• Black Friday may have been coined by Philadelphia police because of the difficulties with crowds and traffic.

• The day is now said to refer to the time that retailers go from the red (not making money) to black (profitable) for the year.

• It became the first shopping day of the holiday season as a result of many cities having Santa Claus holiday parades, and retailers having Santa come out into the stores and the malls.

• Web sites such as www.blackfriday.info, www.black-friday.net and www.theblackfriday.com let consumers know in advance about Black Friday sales.

• Retailers have tried to sue these sites to take down the ads or make it illegal for them to put them up, but these suits have not worked.

— Purdue Retail Institute