Target to cut back on holiday staffing

Target to cut back on holiday staffing
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Target to cut back on holiday staffing Target to cut back on holiday staffing


The number two retailer in the United States, Target Corp, has announced it will hire fewer seasonal employees. The reasoning behind the move is that fewer employees could help the company reduce costs in the midst of lower store traffic and weakened consumer spending. The retailer has reported results that were disappointing during the last few quarters. Those disappointing amounts have been blamed on the continued economic challenges across the country.

The company struggled through a disappointing back-to-school sales period. Experts don’t think the company will find its much needed relief during the holiday season. In an early forecast, many have predicted weak holiday sales this year because consumers will spend cautiously, the season will be shorter and shopping trends have changed.

Last holiday season, Target added about 88,000 people to its payrolls with expectations of large sales volume anticipated during November and December. Those expectations, however, were overestimated and the retailer’s sales increased only by 0.4% because of high markdowns and lower than expected store traffic.

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The retailer expects to hire only about 70,000 seasonal workers this holiday season, which many say is a move that is just basically in response to current retail traffic trends. ShopperTrak, which measures traffic across the globe at 60,000 stores, said this year’s holiday season will see the weakest gains since 2009. Retail sales during November and December are expected to increase by only 2.4%, while last year saw a 3% improvement. During 2010 and 2011, the improvement level was at 4%. Store traffic is expected to see a decline of about 1.4%. Although last year’s holiday season was weak, there was a 2.5% increase in store traffic.

The U.S. economy is recovering, but slowly. Consumers continue to remain cautious about spending. Right now, there are concerns about the situation in Syria and the possibility of a government shutdown. Higher health care costs and increasing gasoline expenses, coupled with payroll tax increases, are weighing heavy on consumer spending. Reuters conducted a poll that showed 33% of consumers plan to spend less on electronics, toys and jewelry while 27% plan to spend less on apparel during the upcoming holiday season.

Last year, there were 31 days between Black Friday and Christmas, but this year the season is shorter with only 25 days during that timespan. That cuts the shopping down to four weekends instead of five between Thanksgiving and Christmas. Weekends have traditionally been the busiest time for shopping.