Retailers Hiring Aggressively In Hope Of Strong Holiday Sales

Retailers appear to be preparing for their best Christmas in years, based on the hiring they did last month in their initial staffing preparations for the holiday season.

The retail industry added 28,000 positions in October, according to figures the Labor Department released Friday. The number compares with 63,000 positions shed in October 2009, and 80,000 spots that were lost the year before. The prior two years were the thick of the recession, but retailers even reduced their workforce by 2,600 in October 2007, two months before the recession officially began.

The latest numbers "suggest that retailers are anticipating customers are coming back," said Craig Rowley, vice president of retail consulting for the Hay Group. "They are basing this assessment on more people having come in during the year and nascent signs of greater discretionary spending."

Industry groups estimates for holiday sales range from flat from a year ago to 3.5% growth.

Retailers also started hiring early because they began their Christmas promotions sooner, with Christmas trees on display at some warehouse clubs during October, Black Friday deals being rolled out in some cases and toy catalogues issued.

"We are optimistic about Christmas," a Toys "R" Us spokeswoman said.

The October positions by and large are new slots with turnover in the retail industry way down. Rank and file retail positions, once thought of as a short-term employment, are now being kept longer because higher-paying positions are still hard to come by given the country's high unemployment rate.

Several large retailers have announced in recent weeks that they will be adding staff for the holidays.

Macy's Inc. (M) is adding 65,000 seasonal employees nationwide to stores, call centers and distribution centers. Kohl's Corp. (KSS) will hire over 40,000 seasonal staffers, a more than 20% increase from last year, which equates to about 35 additional workers in each store. Toys "R" Us is adding 10,000 seasonal employees to the 35,000 it hired last year. Even Blockbuster Inc., which is operating under Chapter 11 bankruptcy protection, announced its plans to hire around 4,000 seasonal employees in the U.S. for the holiday season.

Macy's said the company's hiring plans are a slight increase over the previous years, "reflecting the company's expectations for same-store sales in the second half of fiscal 2010 to be up by 3 to 3.5%."

Chief Executive Terry Lundgren said Macy's is ramping "up our workforce starting now and running through December" to ensure customers are well-served during the busiest shopping season of the year.

The Labor Department numbers show that retailers' hiring plans are relatively broad-based, with holiday optimism extending beyond the large chains.

Some 7,700 positions were added in October by a broad swath of clothing and clothing accessories stores. Electronics and appliance stores added 4,700 spots, 1,400 positions were added by department stores. General merchandise stores, which include mass merchants and warehouse clubs, reported 4,400 positions. Miscellaneous retailers, which include office-product, stationary, gift and flower shops, added 5,000 spots. Nonstore retailers, a category that encompasses online merchants, added 2,500 positions, the Labor Department figures show.

Last year, there was an overall loss of 69,000 positions from October through December, as retailers did less business with fewer employees, and had overstaffed in anticipation of a better year. The biggest hit was taken the year before, when around 300,000 positions were lost in the retail industry during October through December, one of the worst Christmas selling periods on record.

While massive cuts are not expected as this year's holiday season progresses -- retailers have planned staff and inventory better -- there is still a lot of caution going into the season, evidenced by stores already offering discounts and ready to pull the trigger on deeper ones if decent sales don't materialize.

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com

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