Wal-Mart, Kohls, Toys R Us add seasonal workers

Are the retailers taking on too big of a risk?

By Jonathan Berr Sep 25, 2012 11:21AM
Image, Woman with Santa hat, copyright Stockdisc, SuperStockWal-Mart (WMT), Kohls (KSS) and Toys R Us aren't making a big gamble on the holiday season. They are making a huge one -- especially given that sales are expected to increase at a slower rate than last year.

The largest U.S. retailer has announced plans to add 50,000 seasonal workers, a small increase from last year, while Kohls plans to hire about 53,000, an increase of 10% over last year. 

Toys R Us, which is facing fierce competition from Amazon (AMZN) and other larger rivals, may be taking the biggest risk of all ahead of the busiest shopping season. It will hire about 45,000 seasonal workers, a 13% increase over the previous year, for jobs that range from store associates to managers. Some of the positions have the potential to become permanent, according to the Wayne, N.J., company. Hiring begins this week and will last through December.

As the holiday season approaches, the question for investors will be how much the chains are willing to sacrifice margins for sales, given that their costs will rise because of the increases in their workforces. These retailers are betting on better times and it's easy to see why. Consumer sentiment is on the rise and hit a seven-month high in September. An improving housing market certainly helps, as does a a drop-off in gasoline prices. But there are a few big unknowns that could take the wind out of the economy's sails.  

Unemployment probably won't get significantly better for the rest of the year, considering the tepid pace of jobs growth. Consumers are still reluctant to take on significant debt, which may make it more difficult for retailers to unload big ticket items like big-screen televisions during the holidays.

Further, Europe remains a basket case. The U.S. could easily fall back into a recession if conditions there worsen significantly, which is always possible. A recent report forecast that the Greek economy would shrink 25% by 2014. China's red-hot economy also is slowing, which could spell trouble for U.S. multinationals.

The biggest wild card, however, for the U.S. consumer is the price of gas. Even a slight increase could sap the enthusiasm of consumers, particularly those who don't have much disposable income. This remains a possibility given the tensions in the Middle East.
 
People who land these seasonal retail jobs shouldn't get too comfortable.

Jonathan Berr is long Wal-Mart. Follow him on Twitter@jdberr.
Tags: AMZNWMT
1Comment
Sep 26, 2012 7:41AM
avatar

Just what America needs... tens of thousands of temporary jobs at Minimum Wage pumping foreign made garbage pulled from giant warehouses and priced to undermine any new enterprise trying to compete. With most American households purging trash and trinkets to clean their houses out, this holiday season should be illuminating. Expect two types of shoppers... people using other people's credit cards and grand-people ignoring their suppression impact on our Society, attempting to bribe love from the grandkids. I won't shop Wal-Mart. It is as anti-American a business as they come. May they get stuck with floor-to-ceiling inventory nobody buys.

 

How to make a better Holiday Season for yourself and your family: Have a no cell phone day and get the kids out of their bedrooms. Bundle up and go for a family walk for at least a half hour, strive for an hour. Have a neighborhood Hot Cup Day where various neighbors serve something hot that goes in a mug or cup. Play Board Games together. Play Card Games together. Do something that requires-- together. Watch a movie, shut it off as it ends and TALK about it together. Stop trying to buy or get for satisfaction. Handheld devices are destroying America. Make the Holiday Season a time of year to stay clear of texting and staring into little screens and calling that-- living. It isn't. Go make fun doing something that makes you naturally happy!!!

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