Americans Spend More Than Expected as Holiday Season Heats Up

November retail sales up 0.8% from prior month; economists saw 0.3% increase

Customers checking out at a Target store in Alexandria, Va., in November.
Wall Street Journal

 

Americans are spending more than expected this holiday season, fueled by income gains, confidence in the economic outlook, buoyant financial markets and modest inflation.

The boost includes in-store and online spending at brick-and-mortar retailers such as Wal-Mart Stores Inc. and Nordstrom Inc., which clocked the largest year-over-year November sales increase in seven years. Home-furnishing stores and electronics-and-appliance stores also logged strong spending numbers, despite competition from online-shopping websites, which also posted robust gains.

“It’s an impressive start to the holiday season and probably the best in the last few years,” said Jack Kleinhenz, chief economist at the National Retail Federation, a group that represents retail stores. “When you put the pieces together, job and wage gains, modest inflation, healthy balance sheet and elevated consumer confidence…there’s an improved willingness to spend.”

Altogether, sales at online retailers, brick-and-mortar stores and restaurants rose 0.8% in November from the prior month, well above the 0.3% increase economists surveyed by The Wall Street Journal had expected. That was up 5.8% from a year earlier, the largest yearly November increase since 2011. Despite their woes from online competition, general merchandisers such as department stores fared well, registering a 3.6% sales increase from a year earlier, the best November performance since 2010.

“Overall these data are much stronger than expected,” said Ian Shepherdson, an economist at Pantheon Macroeconomics, in a note to clients. “People have the inclination and the wherewithal to continue spending at a robust pace.”

Taken altogether, the data suggest the U.S. is on track for robust growth in the fourth quarter. Macroeconomic Advisers, a forecasting firm, estimated the economy is growing at a 2.8% annual pace in the October-to-December period, up from a 2.6% forecast before the retail-data release. The Federal Reserve Bank of Atlanta estimated a 3.3% growth rate.

One caveat: Spending is so strong it is outpacing income gains, meaning Americans are saving at a slower rate, which could lead to a spending slowdown later or the threat of rising debt levels.

Spending comparisons to last year were boosted by a weak holiday season in 2016 for retailers, which were plagued by high inventories and a slowdown in purchases by international tourists amid a rising dollar.

This year, some brick-and-mortar stores appear to be better managing their inventory. In their most recent quarter, both Macy’ s Inc. andKohl’s Corp. said their stores had less excess merchandise to clear out at steeply reduced prices. “We don’t have the albatross of a lot of extra inventory like we did last year,” Macy’s Chief Executive Jeff Gennette said in an interview on Black Friday. That, in turn, resulted in less discounting, Mr. Gennette said.

Mr. Kleinhenz said increasingly sophisticated website and app advertising is helping brick-and-mortar retailers too. “It’s a combined strategy that retailers have developed that integrates the use of the internet with the brick-and-mortar shopping approach,” he said.

A Brief History of Retail

The retail industry is undergoing another major shift — to e-commerce. How did we get here?

Since Nov. 1, online revenue has risen 24% compared with the same period last year, said Slice Intelligence, a research firm that tracks online purchase receipts. Online sales at Target Corp. ,Kohl’s Corp. and Costco Wholesale Corp. rose the fastest, the firm said, though Amazon continued to grow rapidly from a larger sales base.

Better-than-expected quarterly results were reported by some mall stalwarts that have been battered, including Macy’s Inc. and Gap Inc. “There is a consolidation taking place” in the apparel market, Gap CEO Art Peck told analysts on Nov. 16. “Almost regardless of consumer sentiment, we’ve got an opportunity to drive growth and gain market share,” Mr. Peck said, as the company closes stores, remodels others and speeds up its product pipeline.

 The closure of thousands of stores this year could be giving those left standing a boost.

“On an overall basis, a portion of our improvement in our sales trend is attributable to our targeted efforts to capture share from competitive store closures in some of our trade areas, and we expect this will continue, if not accelerate, through the holiday season,” Kohl’s CEO Kevin Mansell told analysts in November.

Some businesses, meanwhile, are feeling a boost from the stronger labor market. Pete Benck, owner of Madison, Wis.-based vintage clothing store Good Style Shop, said this holiday season’s business has been stronger than last year’s.

“We have had a lot of foot traffic, and I think there’s a lot of confidence in our consumers lately,” Mr. Benck said.

The National Retail Federation expects consumers nationwide to spend about 4% more during the holiday shopping season than they had in 2016. That would make 2017 the strongest holiday season since 2014. Mr. Kleinhenz said the U.S. appears to be on track to meet that goal.

Write to Sharon Nunn at sharon.nunn@wsj.com

Photo credit: Customers checking out at a Target store in Alexandria, Va., in November. PHOTO:REYNOLD/EPA/SHUTTERSTOCK

Retailers Are Hoping For the Best Christmas Sales Since the Recession

With consumer spending surging, retailers are hoping for something they haven’t seen since the last recession began a decade ago: a truly great Christmas.

The Commerce Department reported better-than-expected U.S. retail sales for November and revised its October figures upward, bringing a fresh wave of optimism to a long-embattled industry.

Holiday shoppers are snapping up Nintendo Switch devices and Fingerlings toys as their disposable income grows, according to Craig Johnson, head of the Customer Growth Partners. His research firm just boosted its forecast for holiday sales to 5.6 percent, well above the 4.3 percent it had targeted earlier.

“We think this marks the beginning of a real and sustained rebound,” Johnson said in an interview. After tracking the 50 largest retailers across 90 major shopping venues, he believes that spending will grow more this season than in any holiday since before the Great Recession began in 2007.

“It’s all demographics, and it’s geographically widespread,” he said.

Austin Kreitler, a 21-year-old college student in New York, is one shopper who is ready to open his wallet this holiday season.

“I definitely spent more this year than I have in previous years,” he said during a visit to Bloomingdale’s in Manhattan. “I got some novelty things, but I also got my mom a pearl necklace and earring set.”

E-Commerce Growth

The spending uptick is good news for retailers of all stripes, but some are faring better than others. Online spending growth is expected to outpace brick-and-mortar expenditures, and plenty of companies are still struggling.

Pier 1 Imports Inc., the home-furnishings chain, saw sales weaken in the first two weeks of December. The slow start to the holiday season weighed on the company’s fourth-quarter forecast, sending the shares on their worst rout in almost three years Thursday.

Traditional retailers are increasingly chasing online dollars. Wal-Mart Stores Inc. has acquired web brands such as Jet.com and Bonobos, and it’s offering two-day free delivery to entice shoppers. Target Corp., meanwhile, agreed to buy e-commerce startup Shipt Inc. this week for $550 million, aiming to challenge Amazon.com Inc.

The greater emphasis on online orders may be one reason why a rosier holiday season isn’t translating into traffic gains at many malls. During Black Friday, foot traffic was down slightly for the second year in a row, according to data compiled by Prodco Analytics and Bloomberg.

Genevieve Domingo, a shopper who was trying on boots at Bloomingdale’s, said she’s getting most of her gifts online this year, including a Game of Thrones drinking horn and a DNA kit for her brother.

Broad Gains

Merchants without physical stores saw their biggest sales gain last month since October 2016, the Commerce Department reported on Thursday. But retail growth was broad-based, with 11 of 13 categories posting increases. Apparel sales had their third straight uptick, the longest such stretch since mid-2014.

The numbers indicate that household spending, which accounts for about 70 percent of the economy, is picking up during the final stretch of the year. The job market remains strong, with solid hiring and an unemployment rate that’s the lowest since December 2000. In addition, stock-market gains and rising home values are boosting household wealth.

If this season’s sales reach Customer Growth Partners’ target, it would be the best holiday performance since 2005. The industry posted a 6.1 percent increase that year, when the economy was still booming and a red-hot housing market was fueling spending.

Tax Cut?

One wild card is the tax bill wending its way through Congress. The legislation promises to to lower the burden for households by doubling the standard deduction, but consumers who can’t withhold as much of their state and local taxes could lose some spending power.

The National Retail Federation, the industry’s biggest trade group, has argued that consumers are spending more this season because they anticipate a tax cut. About 174 million Americans shopped during the long Thanksgiving weekend, 10 million more than expected, the organization said.

“All in all, it’s really portending for a very solid and maybe one of the best holiday seasons that we’ve seen in years,” Jack Kleinhenz, the NRF’s chief economist, said in an interview. “We’ll have to wait and see how December plays out.”

— With assistance by Matthew Townsend, and Sho Chandra

Bloomberg

Photo credit: Pedestrians view a holiday window display at a department store in New York.Photographer: Victor J. Blue/Bloomberg

Americans Spend More Than Expected as Holiday Season Heats Up

Shoppers

 

Americans are spending more than expected this holiday season, fueled by income gains, confidence in the economic outlook, buoyant financial markets and modest inflation.

The boost includes in-store and online spending at brick-and-mortar retailers such as Wal-Mart Stores Inc. and Nordstrom Inc., which clocked the largest year-over-year November sales increase in seven years. Home-furnishing stores and electronics-and-appliance stores also logged strong spending numbers, despite competition from online-shopping websites, which also posted robust gains.

“It’s an impressive start to the holiday season and probably the best in the last few years,” said Jack Kleinhenz, chief economist at the National Retail Federation, a group that represents retail stores. “When you put the pieces together, job and wage gains, modest inflation, healthy balance sheet and elevated consumer confidence…there’s an improved willingness to spend.”

Altogether, sales at online retailers, brick-and-mortar stores and restaurants rose 0.8% in November from the prior month, well above the 0.3% increase economists surveyed by The Wall Street Journal had expected. That was up 5.8% from a year earlier, the largest yearly November increase since 2011. Despite their woes from online competition, general merchandisers such as department stores fared well, registering a 3.6% sales increase from a year earlier, the best November performance since 2010.

“Overall these data are much stronger than expected,” said Ian Shepherdson, an economist at Pantheon Macroeconomics, in a note to clients. “People have the inclination and the wherewithal to continue spending at a robust pace.”

Taken altogether, the data suggest the U.S. is on track for robust growth in the fourth quarter. Macroeconomic Advisers, a forecasting firm, estimated the economy is growing at a 2.8% annual pace in the October-to-December period, up from a 2.6% forecast before the retail-data release. The Federal Reserve Bank of Atlanta estimated a 3.3% growth rate.

One caveat: Spending is so strong it is outpacing income gains, meaning Americans are saving at a slower rate, which could lead to a spending slowdown later or the threat of rising debt levels.

Spending comparisons to last year were boosted by a weak holiday season in 2016 for retailers, which were plagued by high inventories and a slowdown in purchases by international tourists amid a rising dollar.

This year, some brick-and-mortar stores appear to be better managing their inventory. In their most recent quarter, both Macy’s Inc. and Kohl’s Corp. said their stores had less excess merchandise to clear out at steeply reduced prices. “We don’t have the albatross of a lot of extra inventory like we did last year,” Macy’s Chief Executive Jeff Gennette said in an interview on Black Friday. That, in turn, resulted in less discounting, Mr. Gennette said.

Mr. Kleinhenz said increasingly sophisticated website and app advertising is helping brick-and-mortar retailers too. “It’s a combined strategy that retailers have developed that integrates the use of the internet with the brick-and-mortar shopping approach,” he said.

The retail industry is undergoing another major shift — to e-commerce. How did we get here? Photo: Associated Press Related Video

Since Nov. 1, online revenue has risen 24% compared with the same period last year, said Slice Intelligence, a research firm that tracks online purchase receipts. Online sales at Target Corp., Kohl’s Corp. and Costco Wholesale Corp. rose the fastest, the firm said, though Amazon continued to grow rapidly from a larger sales base.

Better-than-expected quarterly results were reported by some mall stalwarts that have been battered, including Macy’s Inc. and Gap Inc. “There is a consolidation taking place” in the apparel market, Gap CEO Art Peck told analysts on Nov. 16. “Almost regardless of consumer sentiment, we’ve got an opportunity to drive growth and gain market share,” Mr. Peck said, as the company closes stores, remodels others and speeds up its product pipeline.

The closure of thousands of stores this year could be giving those left standing a boost.

“On an overall basis, a portion of our improvement in our sales trend is attributable to our targeted efforts to capture share from competitive store closures in some of our trade areas, and we expect this will continue, if not accelerate, through the holiday season,” Kohl’s CEO Kevin Mansell told analysts in November.

Some businesses, meanwhile, are feeling a boost from the stronger labor market. Pete Benck, owner of Madison, Wis.-based vintage clothing store Good Style Shop, said this holiday season’s business has been stronger than last year’s.

“We have had a lot of foot traffic, and I think there’s a lot of confidence in our consumers lately,” Mr. Benck said.

The National Retail Federation expects consumers nationwide to spend about 4% more during the holiday shopping season than they had in 2016. That would make 2017 the strongest holiday season since 2014. Mr. Kleinhenz said the U.S. appears to be on track to meet that goal.

Sarah Nassauer Wall Street Journal

Yahoo Finance!

Write to Sharon Nunn at sharon.nunn@wsj.com

Photo credit:Black Friday shoppers sort through their purchases while waiting for their rides at The Mall at Turtle Creek in Jonesboro, Ark. Americans, by most measures, appear ready to shop this holiday season. (Staci Vandagriff/The Jonesboro Sun via AP, File)

Retailers Hope For Strong Holiday Season As November Sales Beat Expectations

U.S. retailers are looking forward to a strong holiday season this year after new numbers show higher than expected sales for November.

The Commerce Department said Thursday that retail and food sales were up 5.8 percent last month over November 2016, according to advance estimates. And, sales were up a seasonally adjusted 0.8 percent from October of this year.

“This has been an impressive start to the holiday season, perhaps the best in the last few years,” Jack Kleinhenz of the National Retail Foundation said in a statement. The group, which represents retail stores, released its own similar estimates Thursday. “The combination of job and wage gains, modest inflation and a [healthy] balance sheet along with elevated consumer confidence has led to solid holiday spending by American households,” he added.

According to The Wall Street Journaleconomists had predicted only a 0.3 percent increase in sales for November.

Sales were up 2.1 percent over the previous month at electronics stores and 1.2 percent at furniture stores, the agency reported.

Surveys show customers are the most confident they’ve been since 2000, according to The Associated Press. The most recent unemployment report from the Bureau of Labor Statistics put the country’s unemployment rate at 4.1 percent in November, the same as it was in October. It’s the lowest unemployment rate since before the economic recession that began a decade ago.

In a sign of confidence in the economy, the Federal Reserve raised interest rates this week for the third time this year and the fifth time since the economic crisis.

Though to add some caution to the optimism, the Journal noted that strong spending “is outpacing income gains, meaning Americans are saving at a slower rate, which could lead to a spending slowdown later or the threat of rising debt levels.”

The newspaper also said that “high inventories and a slowdown in purchases by international tourists amid a rising dollar” contributed to a poor holiday season for retailers last year.

The National Retail Federation said sales for this year’s holiday season, which they define as November and December, “are on track to meet or exceed NRF’s holiday sales forecast for an increase between 3.6 and 4 percent over last year.”

A Bit of Ho Ho Ho fo the Retail Industry

Stores got a bit of yuletide cheer as employment numbers recently released by the government show that nearly 13,000 retail jobs were added to payrolls in November – due mostly to seasonal shopping.

With that number, the National Retail Federation said the retailers’ annual hiring of temporary holiday workers is on track to reach the high end of the the NRF’s forecast of between 500,000 and 550,000 temporary jobs for the season. “This was one of the strongest gains we’ve seen all year,” NRF Chief Economist Jack Kleinhenz said.

Also, warehouse and distribution center employment increased by 8,100 jobs in November but did not count as retail jobs even if the workers were employed by retailers.

When looking at the entire economy, U.S. companies added a healthy 228,000 jobs in November. The NRF is forecasting that holiday sales will inch up by 3.6 percent to 4 percent this season.

 

By Deborah Belgum

Apparel News

Retailers’ wish lists feature early holiday shopping

Most consumers haven’t bought their Thanksgiving turkey yet, but it’s already the holiday shopping season in the minds of many retailers.

Wal-Mart Stores Inc., Target Corp. and others are aggressively advertising holiday specials online and in stores to get a jump on the spending spree that remains a k.

Black Friday has become black November,” quipped Steve Barr, head of the U.S. retail and consumer sector at PwC, the accounting and advisory firm. That’s because so many retailers are rolling out their holiday price cuts well in advance of Black Friday, once the traditional start of holiday buying.

Although Black Friday remains a big shopping day, its import has been eroded by ever-earlier bargains, the growing clout of online shopping and retailers’ fear that the other guy is getting a jump on them. That competition anxiety was behind the push five years ago to open stores on Thanksgiving Day, and merchants are proving again this year that they can’t open their physical stores early enough to launch the season.

Wal-Mart, Kohl’s Corp., Toys R Us Inc. and several others plan to open on Thanksgiving again this year — some even earlier than in 2016 — a move that in past seasons drew grumbling from some consumers and retail employees unhappy with retail’s “Christmas creep.”

Brick-and-mortar stores are expected to lose more ground this year to the convenience of shopping by phone or computer.

E-commerce has become so pervasive that U.S. online retail sales this holiday season are expected to reach $107.4 billion this year, a 13.8% jump from last year and the first time they’ll top the $100-billion mark, the research firm Adobe Analytics forecasts.

Altogether, U.S. holiday retail sales (those for November and December) should climb between 3.6% and 4% this year, to as much as $682 billion, the National Retail Federation forecasts.

The economy is helping.

“The combination of job creation, improved wages, tame inflation and an increase in net worth all provide the capacity and the confidence [for consumers] to spend,” Jack Kleinhenz, the NRF’s chief economist, said in a statement.

And retailers are trying to cover every shopping preference and garner every possible sales dollar as they launch the holiday spending season, which can account for about 40% of a retailer’s annual revenue.

Indeed, it would be a mistake to confuse the woes of the retailers’ physical stores — which partly reflects that too many locations were built to survive the shift to online — with the notion that Americans no longer care as much to step foot in stores for “doorbusters” and other deeply discounted goods, analysts said.

After all, if online shopping is all the rage, why bother opening stores on Thanksgiving Day?

Because “a website can’t give you goosebumps” like those experienced in touching, buying and taking home the electronics, apparel and other goods bought during the holidays, Barr said.

“Let’s say you and I both want to buy a TV on Thanksgiving Day,” he said. “You go online and it’s going to be delivered in two to three days. I go to the store, get my TV and I’m home in an hour and watching it. It’s an emotional interaction, and that’s what they’re appealing to on Thanksgiving Day.”

The International Council of Shopping Centers, a trade group, said its latest survey indicated that 84% of shoppers on Thanksgiving weekend expect to head to stores. And 85% of the respondents said they expect that when they get there, their purchases will depend on deals or promotions.

That expectation of seeing tantalizing price cuts is partly the fallout from the surge in internet shopping, a segment in which the likes of Amazon.com have put huge downward pressure on prices.

Americans’ online purchases on Cyber Monday alone will climb 16.5% from last year to $6.6 billion, making it the largest online-shopping day in history, Adobe estimates.

The term “Cyber Monday” was coined by staffers at the National Retail Federation in 2005 when they noticed a jump in online sales following the Black Friday weekend.

Many consumers at the time had relatively slow internet connections at home. It became apparent that when they returned to work or school Monday, where they had computers with faster internet speeds, they shopped online.

Retailers seized on the trend and began heavily promoting Cyber Monday as another day for major holiday discounts. And now, of course, fast internet connections are ubiquitous on smartphones, tablets and desktop computers.

This year, Adobe Analytics expects that purchases made on mobile devices such as smartphones and tablets will account for 54% of all e-commerce holiday sales — the first time they’ll surpass online sales made on desktop machines.

Target Corp. and Best Buy Co. were among the retailers that released Black Friday promotional prices on hundreds of items last week — sale prices that will return on Thanksgiving Day and Black Friday.

Best Buy, for instance, was selling a 43-inch LG television at its “Black Friday price” of $279.99, which it claimed was a $150 savings.

Target and other retailers also heavily promoted “sneak peeks” of their Black Friday advertising fliers on their websites in hopes of luring consumers when Black Friday arrives.

Not every retailer will be open Thanksgiving Day, however.

Chains such as Home Depot IncCostco Wholesale Corp., Nordstrom Inc. and Marshalls are among those expected to stay closed Thanksgiving Day, according to BestBlackFriday.com, which tracks the industry.

Outdoor retailer REI Co-op also will close its 151 stores for the third consecutive year on Thanksgiving and Black Friday, a span in which it urges its customers and 12,000 employees to “opt outside.” REI said its website also would not process any online orders those days.

That doesn’t surprise Pam Danziger, who runs the retail consulting firm Unity Marketing. “Many consumers want Thanksgiving to be a pure holiday,” she said.

But Danziger said many chains still opt to open Thanksgiving Day “because they’re desperate to squeeze every last dollar out of their customers,” she said. “They feel like they have to, because the pressure is so high right now to avoid letting their competitors get an inch on them.”

Barr said there’s another reason why retailers open Thanksgiving Day: It’s a way for them to persuade customers to return before Dec. 25.

“If you make that experience as enjoyable as possible in stores on Thanksgiving or Black Friday, they’ll be back later in the holiday season,” he said. “Shoppers never forget how you made them feel.”

L.A. Times

Retail jobs on decline after big weather events

The retail industry lost 18,000 jobs in October, according to the National Retail Federation, and while it’s hard to pinpoint specific reasons, extreme weather events may have played a part.

The figure does not include auto dealers, restaurants or gas stations, and the economy, overall, has added 261,000 jobs, according to the release which cited Labor Department figures.

“Retail jobs were down in October while overall employment was up, but it is difficult to draw conclusions because the jobs data is still distorted by the aftermath of the recent hurricanes,” NRF Chief Economist Jack Kleinhenz said in the release. “The storms have caused some consumers to defer discretionary spending, but at the same time retailers selling building materials saw a significant increase in sales as homeowners and businesses affected by the storms rebuild and make repairs. There continues to be a significant number of job openings in retail, so the drop could reflect a difficulty in hiring given the low unemployment rate. Also keep in mind that retailers are on the verge of adding half a million or more temporary workers for the holiday season.”

Employment at retailers selling building materials and supplies increased by 5,500 jobs in October, noted the release.

 

Retailer Customer Experience

November 7, 2017

Desperate employers search for holiday workers in tight job market

When UPS lured holiday job seekers recently to its Columbus, Ohio, package sorting center, it turned the dreary process of interviews and background checks into a full-blown party complete with candy and movie-ticket giveaways.

Faced with a shrinking labor pool and a need to fill 95,000 extra jobs this holiday season, the Louisville-based delivery giant has been left scrambling to find innovative ways to tempt potential employees— including turning recruiting sessions into celebrations.

It’s not just UPS. As the holidays draw closer and holiday hiring is in full swing, industries across the board are feeling the unintended side effects of a falling unemployment rate— now at a 17-year low of 4.1%. But retail, food services and delivery, industries that are an essential part of the holiday grind, are among the most vulnerable.

“It’s definitely a workers’ market,” says Peter Harrison, CEO of Snagajob, an online job search engine, who says companies on the platform are increasingly struggling to find workers. “No question about it. Right now, employers are having to do everything they can to lure people in.”

Starting with pay. Hooplas and giveaways aside, companies know nothing can help them sign up workers faster than the prospect of more cold hard cash and benefits:

• Target. The big-box retailer recently announced it’s increasing the hourly minimum wage to $11 an hour, with plans to go as high as $15 an hour by 2020.

• J.C. Penney. The department store chain will start offering paid time off, up to one week a year, to eligible part-time employees in early 2018.

• UPS. The deliverer known for its distinctive brown trucks offers weekly retention bonuses, up to $200 a week, as a reward to employees who work every day.

As for getting out the word, that’s where the parties come in.

“It’s just another way to reach people,” says Dan McMackin, a UPS spokesperson, who says recruiters also went to football games and Green Day concerts. “The competition for workers means we’ve got to be creative. We need to get out there and talk to everyone.”

Areas with unemployment levels below the national average have been hit the hardest.

In Columbus, for instance, where UPS held its recent holiday recruiting party, the unemployment rate was 3.8% in September, compared to the U.S. rate of 4.2% (the national rate dipped to 4.1% in October). The Columbus area was tied for 168th-lowest in unemployment among 388 metro areas.

Last summer, in Fort Collins, Colo., where the unemployment rate was 1.9% in September, second lowest in the nation, Abbie Lowe, was struggling to staff her store, Neighborhood Liquors. She had a sign on the door for more than a month in addition to the ads posted on Craigslist. Lowe got four resumes.

“Typically, we had a bigger pool to select potential employees from,” Lowe says. “But there are jobs everywhere here. Even day laborers are getting jobs all the time. We can’t keep anyone in here.”

As the holiday season looms, Target plans to hire more than 100,000 extra hourly workers to help out in stores. Josh King has the story (@abridgetoland). Buzz60

In Exeter, N.H., where the unemployment rate hovers around 2.3%, Ryan Abood, CEO of Gourmet Giftbags, an online retailer that makes upscale gift bags, says he focuses on offering “creature comforts” to lure in holiday-season employees.

“It’s all about creating a good vibe at work,” he says. That includes an office with a pool table, air hockey and ping-pong game.

The company, which sells about a million gift baskets a year, usually triples its full-time workforce during the holiday season from 55 people to around 150. Three years ago, Abood says, he received between 50 and 70 applications. This year he had fewer than 10.

 “It’s gone from bad to brutal for employers in terms of the talent pool,” Abood says. The company now has a bus service that picks workers up and brings them to the workplace.

“It’s bad when employers are busing workers to work to get enough people to execute the work we do,” he says. “We would never do that if the talent pool wasn’t so bad. Why would we go through all that extra hassle?”

Some companies are turning to social media or temporary staffing companies to fill the gap— but have had little luck.

“You ask for 10 temps and they send you eight,” says Butch Yamali, CEO of The Dover Group, which owns 12 companies, including restaurants, a catering hall and a construction company in the Nassau County, N.Y. area. Dover Group has more than 1,000 employees.

 About six months ago, Yamali began offering bonuses to current employees who recommend new people. In the past he never had to worry about finding workers.

“You’d just ask a staff member if they have a friend or relative to work,” says Yamali, who says the holidays are the busiest time of year. “There was always some way to find staff. Now it’s impossible. It hurts. People are out spending money but we don’t have enough staff to catch them properly.”

Other companies are leveraging new technology to compete for workers. More than 50 franchisees and corporate partners across the U.S., such as various McDonald’s and Dunkin’ Donuts, began using Instant Financial earlier this year. The service allows employees to be paid by the day instead of waiting until the end of the week or month.

This summer’s string of hurricanes in the South left an even bigger dent in the labor pool, especially among construction workers.

“This is not necessarily a bad thing for the people looking for jobs,” says Jack Kleinhenz, chief economist at the National Retail Federation. “They’re going to find them.”

But for employers, many have been forced to lower their hiring standards.

“A growing number of employers used to have elaborate assessments to get hired,” Harrison says. “They’ve had to dramatically shorten them—or eliminate them all together in some cases. If they make it too hard to apply, then people will just not apply.”

, USA TODAY

Retail Sales See Solid Gains in First Half of Holiday Season

November retail sales grew a solid 5 percent year over year and 0.1 percent from an already-strong October as consumers found the deals they were hoping for both online and in stores and showed their purchasing power during the first half of the holiday season, according to calculations released today by the National Retail Federation. Online and other non-store sales grew 15.3 percent year over year, reflecting the growth of online shopping. The numbers exclude automobiles, gasoline stations and restaurants.

“Consumers were able to take advantage of low prices throughout the first half of the holiday season, checking out with full baskets but paying less even though purchasing was up,” NRF Chief Economist Jack Kleinhenz said. “The combination of job and wage gains led to solid holiday spending by American households.”

“Consumers have the wherewithal to spend but households remain measured and rational, which is no surprise given their history since the recovery began in 2009,” Kleinhenz said.

There were broad-based monthly increases across the majority of sectors with the exception of sporting goods.

November’s results indicate that retail sales for the holiday season will meet or exceed NRF’s holiday sales forecast, which anticipates an increase of 3.6 percent over last year’s level for November and December. For a look into the art of forecasting, read Kleinhenz’s article: The Art and Science of Economic Forecasting.

A few specifics from the report include:

  • Online and other non-store sales increased 0.1 percent seasonally adjusted over the previous month and increased 15.3 percent unadjusted year-over-year.
  • Sales at clothing and accessories stores were flat from the previous month and increased 1.9 percent unadjusted year-over-year.
  • Sales at general merchandise stores increased 0.1 percent seasonally adjusted over the previous month and decreased 1.4 percent year-over-year.
  • Electronics and appliances stores’ sales increased 0.1 percent seasonally adjusted over the previous month and decreased 2.5 percent unadjusted year-over-year.
  • Furniture and home furnishings stores’ sales decreased 0.7 percent seasonally adjusted over the previous month and decreased 7.2 percent unadjusted year-over-year.
  • Sales at building materials and supplies stores increased 0.3 percent seasonally adjusted over the previous month and increased 7.5 percent unadjusted year-over-year.
  • Sporting goods stores’ sales decreased 1 percent seasonally adjusted over the previous month and increased 1.6 percent unadjusted year-over-year.
  • Sales at health and personal care stores increased 0.1 percent seasonally adjusted over the previous month and increased 7.7 percent unadjusted year-over-year.

More people shopped over Thanksgiving weekend than last year — but they spent less

About 154 million shoppers made purchases at stores or on e-commerce sites this holiday weekend, the National Retail Federation reported Sunday, a bump up from the 151 million people who last year participated in the annual barrage of Black Friday deals.

And though it is encouraging for the retail industry that more consumers opened their wallets this time around, it wasn’t all good news: Average spending per person was down to $289.19 from $299.60 in 2015.

Matt Shay, the chief executive of the National Retail Federation (NRF), attributed the decline in spending to just how deep and broad the discounts were over the four-day weekend. While the promotions offered during this period were probably preplanned and thus baked into the retailers’ sales plans, it could prove a troublesome dynamic for them if ultra-deep discounts end up being needed all season long to get people shopping.

But other factors could have contributed to the decline in per-person spending: Retailers have been spreading their Black Friday deals out over a longer stretch, so it’s possible that many people pounced on offers several days before Thanksgiving even arrived. And NRF’s survey found that about 122 million people plan to shop on Cyber Monday, up from 121 million last year. So perhaps some consumers are holding out for the fresh batch of deals that will arrive after the weekend comes to an end.

The survey results reflect the increasing importance of e-commerce in the retail landscape. This year, about 108.5 million people shopped online over the holiday season, compared with 103 million last year. Meanwhile, the number of people who shopped in stores fell to 99.1 million from 101 million last year.

Indeed, other data released this weekend offers evidence that online spending was strong on Thanksgiving and Black Friday. Adobe, which analyzed 22.6 billion visits to retail websites, reports that a record $3.34 billion was spent online on Black Friday, up 21.6 percent from the previous year. Sales on Thanksgiving Day were up 11.5 percent to $1.93 billion.

Adobe’s research found that top-selling items included iPads, Samsung 4K televisions and toys such as Lego Creator sets and the Barbie Dreamhouse.

The NRF had earlier projected that the retail industry would see a 3.6 percent increase in sales this holiday season over last year. That would be significantly better than the 3 percent growth registered in 2015. The trade group’s chief economist, Jack Kleinhenz, said Sunday that he believes that prediction “holds up pretty well” right now, even as some have asked whether the surprising election results might have altered consumers’ mind-set.

Experts say that in a presidential campaign year, we typically see that the election serves as a temporary distraction, with shoppers getting their gift-buying started a little later than they might otherwise. NRF’s survey seems to reflect that dynamic: About 23 percent of respondents said they hadn’t started their holiday shopping yet, compared with 19 percent last year. And a smaller share of people have finished their holiday shopping. This year, just 9 percent of shoppers have done so, compared with 11 percent last year.

 

November 27 at 3:53 PM

The Washington Post

Photo:Byron Siekavizza wheels his television to his car as he gets a jump-start on shopping for deals at Best Buy on Thanksgiving in Alexandria. (Nikki Kahn/The Washington Post)