Despite historically high inflation in recent years, U.S. consumers have continued to splurge. However, that trend may be ending soon. Americans are expected to focus on must-have purchases, such as groceries, while slowing down on discretionary items. Of all the major retailers that have announced hiring plans, only Amazon is increasing its seasonal hires. Last year, Amazon announced it was hiring 150,000 people for the holidays; this year that figure is 250,000.
Increasing labor costs and shaky consumer confidence are also laid out as major factors. During the last quarter of 2008 during a financial recession, 325,000 jobs were added during the holiday season. During the last quarter of 2022, U.S. retailers added 520,000 jobs, a 26 percent decline from the same period in 2021.
Holiday sales in the U.S. are estimated to grow at their slowest pace in five years, as dwindling household savings and worries about the economy prompt consumers to spend more judiciously. Sales across physical stores and online channels are expected to rise by 3.5 to 4.6 percent between November 2023 and January 2024, according to Deloitte. In 2022 during the same time period and amidst continued rising inflation, sales were up 7.6 percent. The 2023 projections are based on a 3.6 percent rise in inflation, compared to 7.1 percent last year.
The decrease in staffing at retail stores could add up to a frustrating experience for shoppers this holiday season. Retailers will not have enough employees on hand to meet customer demand for assistance. This could have a domino effect and drive shoppers away from making a purchase or keep them from coming back for a long time.
As box retailers and physical stores slow down hiring trends, which in turn negatively impacts customer service, consumers will continue to be driven to online shopping. So, it’s no surprise that online shopping is expected to grow between 10 and 13 percent this holiday season. Industry experts also warn that a slowdown in the job market could further limit holiday spending.
According to the latest data from August 2023, Illinois is tied for the fifth-highest unemployment rate in the U.S. at 4.1 percent. The national unemployment rate is 3.8 percent, a big jump from the 3.5 percent figure from July. The latest data shows that 39 states have an unemployment rate of 3.7 or less. With fewer jobs available this upcoming holiday season, it will be even more difficult for job-seekers to find avenues for extra income in the retail industry.