Sean D. Elliot
A crowd of shoppers wait outside the Target store in Lisbon, Conn., on Nov 25, 2011, before the store opens for Black Friday shopping.
The halls may be decked with boughs of holly, but the malls may not be bursting with shoppers this holiday season.
At least, that's what Target thinks. So the retailer is planning on hiring 20 percent fewer temps to work in its stores in the peak shopping season between Thanksgiving and Christmas.
Target plans to hire about 70,000 seasonal workers -- down from 88,000 last year.
The Minneapolis-based chain has already lowered its outlook for sales this year and in addition to expecting less traffic in its stores, it says that hiring fewer temps allows its own permanent employees to get first dibs on working extra hours for the holiday season.
Holiday hiring typically ramps up next month.
Coming off a slower-than-expected back-to-school season, analysts and stores are bracing for a tough holiday shopping period, which accounts for as much as 40 percent of stores' annual revenues.
That's because while jobs are easier to get and the housing recovery is gaining momentum, the improvements have not been strong enough to sustain higher levels of spending for most shoppers. In fact, many stores such as Target lowered their expectations for the rest of the year, citing a tougher-than-expected spending environment.
Last month, Target said its second-quarter U.S. comparable-store sales increased only 1.2 percent, missing Wall Street analyst expectations.
“For the full year, we’ve become incrementally more cautious in our U.S. sales outlook given our own recent results and those of our competitors,” said John Mulligan, Target's chief financial officer. He said the company mow expects full-year comparable sales to increase about 1 percent -- much lower than its prior outlook for an increase of 2 percent to 2.5 percent.
Target said by hiring fewer temporary sales assistants, it can respond more quickly to the peaks and valleys of customer traffic, which have become more pronounced for many stores as shoppers time their buying for when they believe they can get the best deals.
"We're getting smarter in terms of anticipating how many resources we need when guests are really going to be shopping the hardest," said Jodee Kozlak, Target's executive vice president of human resources.
Kozlak said that Target workers want to work extra holiday hours because they enjoy helping out during the busy holiday season, and they want to make extra money for family gifts. She added that Target employees who choose to work extra for the holiday seasons can add anywhere from 5 percent to 10 percent to their working hours compared with a year ago.
Last year, one third of Target's temporary holiday hires became permanent workers, Kozlak said.
First published September 20 2013, 9:04 AM