As the economy continues its streak of slow, steady improvement, the National Retail Federation offered an upbeat forecast Tuesday for the upcoming holiday shopping season.
The trade association expects retail sales to increase 4.1 percent this November and December to $616.9 billion — much better than the 3.1 percent uptick seen last year.
“Retailers could see a welcome boost in holiday shopping, giving some companies the shot in the arm they need after a volatile first half of the year and an uneventful summer,” NRF chief executive Matthew Shay said in a statement.
Indeed, 2014 has been a rocky year for many retailers, beginning with an unusually punishing winter that kept many shoppers on the sidelines. Many major retailers saw weak sales and foot traffic through the spring and summer. Wal-Mart, for example, reported flat sales at stores open at least a year during the first two quarters. Target saw flat sales last quarter and a dip in the number of transactions in its U.S. stores.
Those retailers have said that the recent sluggishness at their businesses was in part fueled by consumers’ cautious attitudes: Even though the economy is healthier, many of them are still highly budget-conscious.
And so this holiday season, many retailers have said they expect that deep discounting will once again be an essential tactic to luring shoppers.
Still, lower gas prices and a high-flying stock market could leave consumers with more dollars to spend this holiday season, according to Alison Paul, U.S. retail and distribution leader at Deloitte. Paul said this year could mark the return of what she calls the “me too gift” — when shoppers nab a little treat for themselves while they’re out buying presents for family and friends.
“That impulse shopping has been some of what has fallen off in the recession,” Paul said. “People have been very list-oriented, and we think this extra disposable income will play well with that.”
Judging from their hiring plans, it appears some retailers are counting on a greater swell of holiday shoppers this year. Wal-Mart has said it intends to hire 60,000 temporary workers this year, a 10 percent increase over 2013. The retail giant also has said it will have more cash registers open this year during peak shopping hours.
Kohl’s plans to hire more than 67,000 temporary workers, 15 percent more than last year. Macy’s plans to add 86,000 workers , a nearly 4 percent increase from 2013. About 10,000 of those employees will be based in Macy’s distribution centers and will be focused on primarily supporting the company’s e-commerce operation.
UPS, meanwhile, is girding itself for what is expected to be a crush of holiday-season package deliveries as more shopping moves online. (The NRF predicts online sales will be up between 8 and 11 percent this holiday season, tallying up to $105 billion.)
Last holiday season, UPS underestimated just how many packages would come through its systems at the last-minute and failed to deliver some packages in time for Christmas .
This year, UPS is aiming to be better prepared, with plans to hire between 90,000 and 95,000 temporary workers. That’s up from the 85,000 seasonal workers it brought on last year.
Overall, the NRF expects retailers to hire between 725,000 and 800,000 temporary workers this season. Another forecast, from the outplacement firm Challenger, Grey & Christmas, says that the retail industry will see seasonal employment gains greater than 800,000 positions.
“The last two years saw holiday hiring return to pre-recession levels,” chief executive John A. Challenger said in a statement. “This year, we could see hiring return to levels not seen since the height of the dot-com boom.”