Dollar Tree Inc. DLTR is the latest to join the hiring spree, with plans to take aboard more than 25,000 associates for the Dollar Tree and Family Dollar stores at its fourth annual Nationwide Hiring Event to be held on Oct 16, 2019. These workers will be appointed across its 15,000 Dollar Tree and Family Dollar stores in the United States. The move will enable the company to gear up for the peak holiday season to provide customers with a robust shopping experience.
Apart from the reward package, seasonal employees will have the opportunity to be selected as permanent staff in the company’s newly opened stores. Notably, Dollar Tree opens hundreds of stores every year.
Holiday Rush Triggers Seasonal Hiring
The holiday season is a crucial time for retailers as it accounts for a sizeable chunk of yearly revenues and profits. Retailers try to attract customers with early-hour store openings, huge discounts and other promotional strategies. However, concerns related to trade war, rising crude prices, sluggish business spending and other geopolitical issues are fueling worries of an economic slowdown. In fact, the imposition of tariffs has left some retailers with no other choice than opting for selective price increases while trying not to hurt sales during the holiday season.
Nonetheless, strong labor market and favorable consumer sentiment should work in favor of retailers. Looking at the mass seasonal hiring undertaken by retailers every year to cater to the holiday rush, The National Retail Federation (“NRF”) anticipates retailers to employ about 530,000-590,000 temporary workers this year. This compares with nearly 554,000 seasonal employees hired in 2018.
Other retailers treading on this path are Macy’s M, DICK’S Sporting DKS and Target TGT, who have announced hiring events recently. For instance, Macy’s expects to hire nearly 80,000 seasonal workers for the holiday season. The workers will be appointed for Macy’s and Bloomingdale stores, distribution and fulfillment centers, and call centers. DICK’S Sporting plans to deploy around 8,000 associates for the holiday period. Likewise, Target intends to appoint more than 130,000 seasonal workers to provide a great shopping experience to customers.
Robust Holiday Season Sales Likely
Keeping the concerns aside for a while and going by Deloitte’s recent holiday sales projection, retailers are all set to revel again in the euphoria of the upcoming festive season.
Holiday sales are projected to increase 4.5-5% and exceed $1.1 trillion between November 2019 and January 2020. Meanwhile, e-commerce sales are estimated to improve 14-18% to reach $144-149 billion. Numbers look robust compared with the last year when sales in December were affected by the U.S. government shut down, battered stock market and increase in consumer savings.
Further, NRF expects holiday retail sales in the months of November and December to increase about 3.8-4.2% (excluding automobiles, restaurants and gasoline) to $727.9-$730.7 billion. This reflects an increase from $701.2 billion in 2018. Moreover, NRF anticipates online and other non-store sales to improve 11-14% to $162.6-$166.9 billion. Meanwhile, online and non-store sales were $146.5 billion in the last year.
Coming back to Dollar Tree, the seasonal hiring plans reflect its focus on enhancing customer experience. The company’s consumer-friendly moves are highlighted by its competitive pricing strategy and store expansion plans, including remodeling and relocations. Dollar Tree recently announced its intention to add merchandise with higher price points to its stores, under the Dollar Tree Plus! initiative. The company is formulating tests to measure the impact of different price points, items and categories; store profitability; and the affinity of loyal customers for the Dollar Tree brand.
Furthermore, Dollar Tree’s restructuring and expansion initiatives are evident from steady store openings and improvement in distribution centers. This should help deliver robust customer experiences. Additionally, its store-optimization program for the Family Dollar brand, including the rollout of H2 — a latest model for the new and renovated Family Dollar stores internally — is set to attract consumers.
We believe that these efforts are significantly aiding the company’s comparable store sales as well as top and bottom lines. Consequently, the Zacks Rank #3 (Hold) company has gained 42.1% in the past year, outpacing the industry’s growth of 25.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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