Retailers Add Just 381,800 Holiday Workers

Slow shopping season contributes to fewer hires, study finds

January 12, 2009

Fewer consumers shopped during the holidays, so stores needed fewer part-time employees. Retailers added just 381,800 seasonal workers between October and December, making it the worst holiday hiring season in 22 years, according to an analysis of the latest employment data by the Bureau of Labor Statistics.

The analysis conducted by global outplacement consultancy Challenger, Gray & Christmas, Inc. revealed that 2008 holiday hiring was 45.3 percent lower than a year ago, when retail employment saw a net increase of 698,300 jobs from October through December. The 381,800 seasonal workers hired this year was the lowest since 1986, when retailers added 378,300 workers.

Retail employment grew by 208,400 in November, adjusted downward from the originally reported 217,200. Retailers added just 119,300 last month, which is the smallest December retail employment gain in the Bureau of Labor Statistics' records, which go back to 1939.

The International Council of Shopping Centers reported that U.S. retail sales fell 2.2 percent in November and December, the worst performance since at least 1970. For some retailers, the numbers were much worse.

Macy's Inc. reported a 7.5 percent decline in same-store sales for November and December, combined. Clothing retailer Gap Inc. reported a 14-percent drop in same store sales for December. High-end retailers Neiman Marcus Inc. and Saks Fifth Avenue saw December sales drop 27.5 percent and 19.8 percent respectively.

"A last minute surge by deal-seekers was not enough to save retailers' Christmas this year," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

"Even online stores struggled to make sales, as consumers cut back on gift budgets amid mounting job losses and tighter credit. With low expectations heading into the holiday season, most retailers simply kept seasonal hiring to the bare minimum."

"Now that the holiday season is over, we will probably see retailers shed the extra seasonal workers and then some. Most of the jobslost will result from temporary holiday workers leaving theiremployers voluntarily to return to school, retirement and family rearing. However, there could be a significant number of involuntary departures, as retailers try to offset dismal sales," said Challenger.

Over the last several years, retailers have cut more workers in January and February than they hired in the preceding three months. After increasing by 698,300 jobs in 2007, retail employment fell by 945,800 in the beginning of 2008. Retailers added nearly 750,000 workers in 2006, but lost more than 800,000 jobs in January and February of 2007.