Target and Walmart are making very different preparations for the holiday season

Walmart, the biggest private employer in the US, is cutting back on its seasonal holiday staffing. It announced it would hire just 40,000 workers, in a mix of full-time and part-time roles, a big drop from the 150,000, mostly full-time people it recruited last year to help man its stores and warehouses. Read more……

Walmart, the biggest private employer in the US, is cutting back on its seasonal holiday staffing. It announced it would hire just 40,000 workers, in a mix of full-time and part-time roles, a big drop from the 150,000, mostly full-time people it recruited last year to help man its stores and warehouses.

In contrast, Target is hiring up to 100,000 seasonal workers across the US, a number consistent with last year, although still below the approximately 130,000 seasonal workers it hired in 2019 and 2020.

The stark difference in hiring numbers is due to Walmart over-hiring last year. The company’s seasonal recruitment in 2021 weighed on its earnings in the first quarter, Reuters quoted Jane Hali, CEO of investment research firm Jane Hali & Associates, as saying.

Pulling back on spending this holiday season

This year’s holiday season is expected to be muted with an anticipated rise in holiday-related spending of between 4% to 6% in year-over-year sales from November to January, much slower than the 15.1% rise in 2021, according to Deloitte’s holiday retail forecast, as consumers turn thriftier in an inflationary environment with fears of a recession lurking.

Both retailers have been dealing with excess inventory problems which have hurt profitability this year.

Still, Target executives said they were optimistic for the end of the year.

“While there’s certainly a cautionary environment in front of us, one thing that seems to be very consistent is a guest and consumer who says they want to celebrate the holiday seasons,” Brian Cornell, chairman of Target Corporation said on its second quarter earnings call in August. So we certainly expect that they are going to be celebrating Halloween this year and actively trick-or-treating and hosting parties with friends and family. We know they’re looking forward to Thanksgiving, and they’re going to look forward to celebrating the Christmas holidays.”

In September, Target rolled out a multi-year partnership with the famed toy maker FAO Schwarz to prepare for holiday gifting. In the first half of the year, Target reported high single-digit growth in toys which it called an “encouraging sign” for its plans for the fourth quarter.

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