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A Hawk Eye Is All You Need This Holiday Season

Zacks Equity Research

Retailers need to be ‘hawk-eyed’ this holiday season to make the most of it. They need to grab every opportunity as and when they come, and try all means to drive in cautious, budget-constrained consumers to the shop as the season may be a tough one. Retailers are gradually padding up for the upcoming holiday season and gearing up to better serve the patrons.

Data compiled by ShopperTrak suggest that retail sales are projected to increase 2.4% this holiday season. However, the expected growth rate has tempered down from 3% registered in 2012, 4% in 2011 and 3.8% in 2010, hinting at a stiff competition ahead. This leading provider of shopper analytics also reveals that store traffic would decline 1.4% during this holiday season as against an increase of 2.5% witnessed in 2012.

What is further making this holiday season challenging for retailers is the time frame - as 2013 presents only 25 days between Black Friday and Christmas as against 31 days last year. Moreover, retailers, who witness more traffic during weekends, will have only 4 full weekends this time around versus 5 in 2012.

It is also obvious that the overall economic scenario doesn’t seem much convincing, as the Federal Reserve decided to continue its $85 billion monthly bond-buying program, better known as quantitative easing (:QE), to keep interest rates low and boost economic growth. The unemployment rate is currently hovering around 7.3%, which is still well above the Fed’s target.

We believe retailers will leave no stone unturned to tap this holiday season. Be it early-hour store openings, promotional events, free shipping on online purchases or heavy discounts, retailers will try all tricks to boost sales. As the coming holiday season seems to be a busy one, the retailers are presently focusing on their seasonal hiring.

Retailers such as Target Corp. (TGT), Wal-Mart Stores Inc. (WMT), Kohl’s Corp. (KSS), hhgregg Inc. (HGG) and Toys “R” Us Inc. have announced their hiring plans for the upcoming holiday season to draw in traffic.

Target plans to employ 70,000 seasonal employees, less than 88,000 it hired last year. Minneapolis, MN-based general merchandise and food discount operator indicated that its own permanent associates are ready to work extra hours during the holiday season. Toys “R” Us Inc. plans to increase its seasonal headcount by 45,000 this year much like last year.

Bentonville, AR-based Wal-Mart Stores disclosed plans to sign over 55,000 seasonal workers, up 10% from the prior year, as it gears up for the holiday season. Kohl’s indicated that it will recruit over 50,000 personnel, as it prepares itself for the busiest part of the year.

The department store also expects to appoint 6,400 associates at its distribution centers and 350 seasonal staffs for its credit operations. Like Kohl’s, hhgregg has also announced to hire 500 qualified home appliance and electronics sales associates to handle the rush during the shopping season for its 228 stores.

After encountering lower-than-anticipated back-to-school season, retailers seem skeptical about the holiday shopping period as the economic improvement is short of expectations, which could have led to higher consumer spending. Consequently, retailers are busy to brace themselves for a tough shopping season.

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