Retailers are significantly reducing their holiday hiring this year, with projections indicating the lowest number of seasonal workers in 15 years. According to the National Retail Federation (NRF), businesses plan to hire between 265,000 and 365,000 seasonal employees from November 1 to December 31, a notable decrease from the 442,000 hired in 2022. This contraction reflects broader challenges in the labor market, as job cuts have surged to their highest levels since 2020.
The NRF’s report highlights a complex landscape where holiday sales are expected to reach historic highs. Despite the reduction in hiring, the organization forecasts that holiday spending will exceed $1 trillion for the first time, with an anticipated increase of between 3.7% and 4.2% compared to last year. These figures suggest that while retailers are cautious, consumer demand for seasonal shopping remains robust.
Labor Market Pressures Affect Retail Hiring
Mark Mathews, chief economist at the NRF, attributed the diminished hiring expectations to a “softening and slowing labor market.” In a recent press briefing, he stated, “But nevertheless, we are confident that retailers will be prepared to meet consumers with the prices, with the goods, and the convenient savings and value they’re looking for this holiday season.”
The report underscores that consumer sentiment is currently subdued, largely due to rising inflation. Concerns over increased prices are further exacerbated by tariffs on imported goods, with a Federal Reserve Bank of St. Louis analysis indicating that retailers passed approximately one-third of new import duties onto consumers between May and July.
Jack Kleinhenz, senior economist at the NRF, emphasized that despite inflationary pressures, consumers appear willing to spend during the holiday season. “All signals are consumers continue to be concerned about inflation and rising prices,” he noted. “Despite these concerns, I believe consumers are still willing to spend, even though their sentiment is at very low levels.”
Strategic Staffing Adjustments by Retailers
Some retailers are adapting their staffing strategies in response to these market conditions. For instance, Target is prioritizing its existing employees by offering them additional shifts before seeking new seasonal hires. This approach allows retailers to manage labor costs while still meeting customer demand during the busy holiday period.
While fewer seasonal positions are being created, the retail sector has seen some firms increase their permanent staff in recent years. Mathews pointed out that this trend could offset the impact of reduced seasonal hiring. “You might see less hiring, but we are seeing less firing in the retail industry,” he explained. “Those two are running neck and neck.”
As the holiday shopping season approaches, retailers find themselves navigating a challenging economic environment. While they brace for a surge in consumer spending, the decision to hire fewer seasonal workers reflects an evolving approach to workforce management, aiming to balance operational needs with the realities of the current labor market.
