Deep Discounting May Not be Widespread this Holiday Season

According to a recently released survey by Hay Group, 68% of retailers expect holiday sales to increase this year. However, hiring plans remain conservative, with 67% of retailers hiring at the same level as 2010 and 25% hiring fewer seasonal workers. 

Retailers have a tempered optimism about the holidays this year. Cost inflation has made profitability more elusive, and retailers are trimming the fat with staffing and store hours,” said Craig Rowley, VP and global practice leader for Hay Group’s retail practice.

Stores are trying to hold down labor costs as they head into the holidays, because they fear they can't pass on other cost increases, such as more expensive cotton, to their customers, say industry analysts.


Retailers also say that the double-​digit increase in Internet sales this is year is influencing hiring levels; 19% of retailers say they will hire fewer seasonal staffers in stores this year.  About a fifth of those surveyed said they were expanding their work force in distribution centers, which fill and ship Internet orders and often pay better than stores do.

As more retailers control labor costs by scheduling their workers for the stores' busiest times, the percentage of retail workers working part-​time has risen. So far this year, 59% of hourly retail staff work has been part-​time, up from 53% in 2009, according to Hay Group.

Other report highlights included an uptick in permanent workers.  Pay rates for seasonal workers are largely even with 2010, but 19% plan a modest uptick of 5 cents to 30 cents. Still, 48% note that they pay seasonal workers less than permanent workers in the same position, compared with 25% last year.


Discounting may not be as rampant in holiday 2011. An overwhelming majority said they are not planning to offer deeper discounts on Black Friday (89%) or Cyber Monday (94%) this year. The timing for discounting also continues to be spread throughout the season. While 78% said the timing for holiday promotions will remain consistent with 2010, 22% said they will begin earlier this year. A majority (63%) plan to start promotions in November, but some early birds plan to begin in October (13%), September (6%) and even August (6%).

[Source:  Survey conducted by the Hay Group.  6 Sept. 2011.  Web.  20 Sept. 2011.]