(Reuters) - Target Corp (TGT.N) said on Wednesday it would hire 100,000 workers for the holiday season, up 43 percent from last year, as the retailer pulls out all the stops to build on its recent uptick in sales.
The company’s shares rose 3.4 percent as the move, coming off four years of flat seasonal hiring, cheered investors in a gloomy retail landscape where companies are shutting hundreds of stores and cutting jobs.
Target posted its first increase in comparable-store sales in five quarters last month, raising expectations that its turnaround plans were taking hold heading into the all-important holiday season.
“I think (Target) sees an opportunity to take market share in an environment where we have so many store closures in the specialty apparel and department store space,” said Retail Metrics analyst Ken Perkins.
Retailers including Sears Holdings Inc (SHLD.O) and Macy’s Inc (M.N) have announced plans to close hundreds of stores as they struggle with increasing competition from Amazon.com (AMZN.O) and fast-fashion retailers such as Forever 21.
Target’s increased store staffing looks to be aimed at preventing loss of sales from customers walking out because of busy checkout lanes or lack of assistance while making purchases, Moody’s analyst Charlie O‘Shea said.
Moreover, Target last week lowered prices on thousands of items, a move that could bring in more traffic.
“I think they have the potential to have a (better) holiday season than any of their competitors,” Perkins said.
Seasonal hiring plans give a glimpse into retailers’ holiday sales expectations as the companies make nearly a third of their annual sales during the period, which starts a day after Thanksgiving and continues into early January.
Employees work at a Target store at St. Albert, Alberta, January 15, 2015. REUTERS/Dan Riedlhuber/Files
With other major holiday season employers such as Amazon, Macy’s and Kohl’s Corp (KSS.N) yet to announce hiring plans, analysts were divided on whether these companies would emulate Target’s hiring spree.
“I would be stunned if we see other retailers increasing their seasonal hiring by 43 percent for the holiday season,” Perkins said.
Wal-Mart (WMT.N) has been spending more on paying higher wages and acquiring online retailers and so is unlikely to boost seasonal hiring to the same extent as Target, he said.
Other major seasonal employers such as Macy’s and Kohl’s have focused on cutting costs.
Moody’s O‘Shea, however, said he expects retailers looking to cut costs to hire more temporary workers during the holiday season.
“There’s a lot of flexibility in the workforce when you (hire temporary workers)... Hiring seasonal employees is a way to test what you really need.”
Retailers could also boost in-store staffing this year as they are now tasking workers with more activities such as manning shipping and pickup from stores, said Brendan Witcher, principal analyst at Forrester Research.
Target also said it would hire 4,500 people for the holiday season at its distribution and fulfillment centers, which supply products to its 1,816 stores and fulfill online orders.
The company had hired 7,500 workers at the centers last year as it required additional staffing for three new facilities.
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