Walmart To Operate In Holiday Season Without Seasonal Staff
Zacks Investment Research | Sep 20, 2017 09:47PM ET
Wal-Mart Stores, Inc. (NYSE:WMT) is gearing up to handle the holiday-season pressure in its own unique way. Like last year, instead of hiring seasonal and temporary employees, the retail giant has planned to offer extra working hours to its existing employees during the holiday season.
Though the company has decided not to hire any additional employees, Walmart remains committed toward meeting customers’ satisfaction with its existing employee base by helping them to shop with ease. The latest move will provide customers with personal shoppers and pick-up associates for online operations. The move will also entitle its permanent employees such as cashiers and shelf stockers, a chance to work for additional hours and earn more during the season.
However, Walmart’s peers are hiring seasonal workers to manage the rush. While Target Corp. (NYSE:TGT) has announced plans to employ 100,000 temporary holiday workers, Macy's Inc. (NYSE:M) will bring on nearly 80,000 seasonal workers for the holiday season.
If we look into the last six months’ performance, we note that Walmart’s shares have rallied 14.6%, higher than the Retail-Wholesale sector has increased 12.1% in the said time frame.
Holiday Season: A Boon or a Curse for Retailers?
Since the season accounts for a third of their annual sales and generates nearly 40% of their profits, retailers try to grab every opportunity to win customers. However, it doesn’t come that easy. Through initiatives such as early-hour store openings, free shipping on online purchases and varied promotional strategies along with huge discounts, retailers are leaving no stone unturned to attract shoppers. However, in the process of winning customers and driving sales, companies lose out on margins due to extreme promotional environment.
The Evolving Retail Environment
The retail environment has been changing dramatically, with technology playing a major role. Customers are inclined more toward online shopping which has hurt sales at brick-and-mortar sales. This transition in shopping pattern is compelling retailers to rapidly address the evolving changes. As a result, retailers are now focusing more on enhancing omni-channel capabilities and developing their e-commerce operations to compete better in an environment, which is dominated by online king Amazon.com Inc. (NASDAQ:AMZN) .
Get The News You Want
Moreover, the recent soft retail sales data for the month of August have somewhat subdued the enthusiasm for the holiday season. Further, the National Retail Federation recently announced a cut in 2017 retail sales forecast, making retailers jittery. A surge in gasoline prices will pinch the pockets of consumers who make bulk purchases during the holiday season. Hurricane Harvey and Irma impact along with North Korea’s back-to-back nuclear tests on Japan have spurred global tensions and unnerved investors. Nevertheless, we believe these short-term headwinds can be overlooked as we can see signs of continuing strength in consumer confidence which in turn will lead to higher consumer spending and fuel growth in the near term.
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