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Discount giant will rely on its own workforce for holiday rush

BY Deena M. Amato-McCoy

Walmart is bucking the holiday hiring trend again this year.

Unlike other competitors that are hiring thousands of temporary workers to service shoppers during the holiday season, the discount giant plans to offer extra hours to its current associates. These shifts will staff traditional roles like cashier and stocker, and newly created technology-empowered positions, such as personal shoppers and Pickup associates, according to Walmart.

“This is the same approach we took last year, and we heard great feedback from our customers and associates,” said Judith McKenna, executive VP and COO, Walmart U.S.

While this is the second year Walmart is pursuing this model, the program has been evolving for some time. In 2015, the discounter committed to hiring 60,000 seasonal workers for the holiday season, but there was a caveat. Before making any new hires, Walmart gave its current employees first dibs on working additional hours during the holiday season.

To ensure its existing workforce is prepared for the upcoming holiday rush, Walmart is offering new training, tools and technology.

“Thousands of associates have completed training in our Pathways and Academy programs, which prepares them to more effectively serve customers, especially during this busy season,” McKenna said.

Walmart also plans to revive its "Holiday Helper" initiative. Armed with candy canes and Santa hats, these employees help customers find the shortest line and open registers, and also quickly grab items customers might have forgotten.

Walmart will be increasing the number of Helpers available in stores this season, the retailer said.

The discounter’s decision to forego a holiday hiring spree contradicts efforts by other retailers. For example, Target plans to hire approximately 100,000 employees for the upcoming holiday season — a 40% increase from last year. Additionally, the retailer will hire 4,500 workers at its distribution and fulfillment centers to replenish products to stores and fulfill digital sales throughout the season.

Similarly, Macy’s plans to hire a total of 80,000 workers for the holiday rush. However, this is down slightly from about 83,000 last year.

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FINANCE

Home goods retailer’s sales tumble in Q2

BY Deena M. Amato-McCoy

A combination of restructuring costs, Hurricane Harvey and a new accounting standard took its toll of Bed Bath & Beyond’s second quarter results.

For the quarter ended Aug. 26, the home goods retailer reported net sales of about $2.9 billion, a decrease of about 1.7% from the same time last year. Comparable sales also decreased by approximately 2.6%, surpassing analysts’ expectations of a 0.7% decrease.

Same-store sales from physical stores declined in the mid-single-digit percentage range during the quarter. However, comparable sales from customer-facing digital channels continued to have strong growth, in excess of 20% for the 13th consecutive quarter.

The company reported net earnings of $94.2 million, a decline from about $290 million for the same period in 2016. Bed Bath & Beyond blamed the slip on cash restructuring charges associated with the acceleration of the realignment of its store management structure, as well as costs associated with the impact of Hurricane Harvey, and a new share-based payment accounting standard.

The company is undertaking a number of transformational initiatives focused on driving operational excellence, as well as opportunities for added efficiencies. These projects “should produce savings in excess of $150 million over the next few years, a portion of which may be strategically reinvested toward future growth,” according to the retailer.

Looking ahead, the company is modeling net earnings per diluted share for the full year to be about $3, with the balance of the net earnings per diluted share to be split approximately 20% in the fiscal third quarter and approximately 80% in the fiscal fourth quarter, the company said.

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ECOMMERCE

Deloitte: Retail holiday sales to increase by at least 4%

BY Deena M. Amato-McCoy

An uptick in consumer spending could drive sales as high as $1.05 trillion this holiday season.

Retail holiday sales should rise a healthy 4% to 4.5% over last year's shopping season — a factor that could drive sales between $1.04 trillion and $1.05 trillion between November 2017 and January 2018, according to the annual retail holiday sales forecast from the firm’s retail and distribution practices. (Holiday sales are seasonally adjusted, and exclude motor vehicles and gasoline.)

There will also be an 18% to 21% increase in e-commerce sales during the 2017 holiday season, compared with 2016. Overall, e-commerce sales are expected to reach between $111 billion and $114 billion during the holidays.

"The projected uptick in holiday sales ties to four primary factors affecting consumer spending, starting with anticipated strong personal income growth," said Daniel Bachman, Deloitte's senior U.S. economist.

"Last year, disposable personal income grew 2% over the year to the holiday period, and we may see that rise to a range of 3.8% to 4.2% this season,” he said. “Consumer confidence remains elevated, the labor market is strong and the personal savings rate should remain stable at its current low level.”

Of course, potential uncertainties could affect income growth and bring the forecast in at the lower end of the range. Among the biggest factors are an increase in the savings rate that would cause spending to expand more slowly. Another is the threat of a government debt ceiling crisis – which has loomed over prior holiday seasons – which could also cut employment and income growth.

The impact of the unusually active hurricane season remains too early to project. However, it could depress spending or increase it, particularly in the home improvement sector, due to rebuilding activity, according to the study.

"Sentiment and spending indicators are firing on all cylinders, but the question is: How will retailers respond given the profound disruption across the industry?" said Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader. "The good news is retail is thriving, and it is the proliferation of new, niche retailers that is resulting in share constantly changing hands.

Faced with unlimited alternatives, consumers continue to bounce between brands, touchpoints and influencers throughout their shopping journey. This makes it increasingly difficult for retailers to attract shoppers without some level of customization.

“These disruptive factors are likely to combine to create a highly competitive and promotional holiday season, according to Deloitte,” Sides added. “Retailers should modify their assumptions about what drives traffic, engagement and holiday sales growth, and realign around customer experience, creating relevant, emotional and inspirational connections that go beyond just product, price and assortment."

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