Retailers' surprise optimism for the holidays
NEW YORK (MarketWatch) -- While the presidential election, the pending fiscal cliff and modest job growth are creating uncertainty over the holiday season, retailers so far are feeling pretty optimistic.
A survey of 14 retailers, including specialty clothing retailers
In an encouraging sign for the still weak job market after the Labor Department on Friday reported a sharp slowdown in August job growth, 36% of the retailers said they plan to hire more employees this holiday season, compared to 10% last year and the highest percentage since 2007, the first year when the survey began.
Retail represents about one in four American jobs, according to a study conducted by PricewaterhouseCoopers for the National Retail Federation. The industry is directly and indirectly responsible for 18% of the U.S. GDP, the study showed.
Discounter
In other good news, the survey showed that the ratio of permanent to seasonal employees retailers plan to have jumped to 43% from 19% last year and was the highest in at least four years.
"All things considered, retailers are on the 'nice list' this year," said Maryam Morse, a leader of Hay Group's retail practice. "With sales improving, retailers are placing more emphasis on retaining and rewarding employees beyond the holiday season."
Also offering a positive signal ahead of the holiday season, the monthly global port tracker report released by the NRF and Hackett Associates showed that import cargo volume at the major retail container ports in the U.S. is expected to rise 8.5% in September, above the 3% increase in the first half. NRF said "strong increases" are expected into the holiday season despite talk of a possible strike at East Coast and Gulf Coast ports.
Retailers also have become smarter with their promotional strategy. While discounts and other promotions are expected to continue to define holiday selling, retailers are controlling inventory better to reduce profit-eroding discounts, the Hay Group survey showed.
As a result of that, retailers are planning to spread out their promotions with 31% of them seeking to begin their holiday promotions even earlier this year, compared to 22% last year. Among those who plan their promotions earlier, more than two-fifths will unleash their marketing ammunition in October, according to the survey.
The survey also showed retailers are more at ease in the face of stiff online competition and a still uncertain economic environment.
For instance, some of the survey's new questions this year showed only 18% of retailers said they feel pressure to match online-only prices while half of the retailers surveyed said they plan to cut back on overall discounting this year. Only 8% of them said they will staff stores to be open 24 hours on select dates throughout the holidays.
"The mood is positive," said luxury retailer
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