Retailers are bracing for the upcoming holiday shopping season with a significant reduction in seasonal hiring, as they plan to employ between 265,000 and 365,000 workers from November 1 to December 31. This figure represents a stark decline from the 442,000 seasonal positions filled last year, marking the lowest level of holiday hiring in 15 years, according to the National Retail Federation (NRF).
The decision to cut back on hiring comes as the broader labor market shows signs of strain. Job cuts have escalated, reaching their highest levels since 2020, and many businesses are hesitant to expand their workforce. Reports indicate that the uncertainty in the labor market is influencing retailers’ hiring strategies.
Despite the reduced hiring expectations, the NRF forecasts that holiday sales will exceed $1 trillion for the first time, with spending projected to rise between 3.7% and 4.2%. In a press briefing held on Thursday, NRF chief economist Mark Mathews explained that the hiring outlook reflects a “softening and slowing labor market.” He expressed confidence that retailers will be adequately prepared to meet consumer demands, offering competitive prices, products, and value during the holiday season.
Consumer Spending Amid Economic Concerns
NRF economists anticipate that consumer spending will remain robust as many shoppers prioritize holiday celebrations over other expenditures, despite a decline in overall consumer sentiment. Mathews noted, “People save for it, they plan for it, they prioritize it, and we think that’s going to happen again this year.”
While consumers are concerned about rising prices, particularly due to inflationary pressures exacerbated by tariffs on imported goods, there remains a willingness to spend. A recent analysis by the Federal Reserve Bank of St. Louis found that approximately one-third of new import duties were passed on to consumers between May and July. Jack Kleinhenz, NRF’s senior economist, acknowledged, “All signals are consumers continue to be concerned about inflation and rising prices. Despite these concerns, I believe consumers are still willing to spend, even though their sentiment is at very low levels.”
Some retailers have been proactive in bolstering their workforce in recent years, which could help mitigate the impact of fewer seasonal hires. Mathews remarked, “You might see less hiring, but we are seeing less firing in the retail industry. Those two are running neck and neck.”
Target has adopted a strategy of asking current employees if they would like to take on additional shifts before seeking to hire new seasonal staff. This approach may help streamline operations while ensuring that demand is met during the busy shopping period.
As the holiday season approaches, the retail landscape appears to be navigating a complex web of consumer behavior, labor market challenges, and economic uncertainty. The NRF’s projections and hiring strategies reflect a cautious yet optimistic outlook as retailers prepare for what is traditionally one of the most lucrative periods of the year.
