Ben Meadows, Ph.D.As the holiday season approaches, businesses and consumers alike are eagerly anticipating the retail trends and expectations for this year. Ben Meadows, Ph.D., an assistant professor of economics at the University of Alabama at Birmingham’s Collat School of Business, provides valuable insights into the projected trends for holiday sales and the potential impact on seasonal hiring in the retail sector.
Like many aspects of the current economy, the outlook for holiday sales growth this year presents an unclear picture.
“There is a bit of a two-handed argument here,” Meadows said. “On the one hand, we have seen strong numbers coming from some sectors of the economy. On the other hand, inflation has taken a bite out of some of the good news we have seen. Specifically for holiday retail, the National Retail Federation expects higher sales numbers than last year, but a slower growth in sales compared to the previous year.”
Meadows suggests that softer sales expectations may not necessarily indicate a decline in sales but rather that sales are expected to align with typical holiday season figures.
“Some stores may try to lower labor costs — hiring — in the face of inflation, while others are set to hire a quarter of a million workers for the holiday rush,” Meadows said.
As for the number of job cuts announced by retailers through August, Meadows says most up-to-date data suggests that total retail hirings have been more sluggish this year compared to previous years, which could have implications for holiday season employment.
Meadows says the anticipated reasons for low retail hiring this year are complex.
“Retailers are concerned about the potential impact of inflation on sales and, as a result, are apprehensive about large hiring sprees if these are short-term seasonal hires,” Meadows said. “Additionally, firms are continuing to focus on e-commerce sales, which places a greater emphasis on warehouse jobs rather than traditional retail positions.”
Meadows cites that year-over-year data from Challenger indicates that the current progress of hiring for seasonal holiday jobs is down by 13 percent and that the challenges retailers face in hiring stem not only from inflation but also from persistent labor shortages.
“Inflation is not the sole driver; it is the combination of inflation and labor shortages that makes hiring difficult and costly for firms,” Meadows said.
In terms of the expected growth rate for United States’ retail sales during the upcoming holiday season, Meadows cites the National Retail Federation’s forecast of a 4-5 percent increase, compared to a 5.4 percent growth in 2022. This year’s growth, however, is still expected to outperform the 2021 holiday season.