Walmart said this summer that while inflation is pushing up sales, it is also curbing consumers’ ability to buy discretionary goods.
Scott Olson/Getty Images
Walmart
is slowing the pace of its seasonal hiring this year, but it is still expecting a “busy” holiday season.
Walmart
(ticker:
WMT
) said on Wednesday it was hiring 40,000 associates in a variety of seasonal and full-time roles. Last year, the company opened 150,000 positions, most of them permanent, to meet the booming demand of a record-setting holiday season.
“Overall, our staffing is stronger heading into this holiday season than it was last year,” a spokesperson said in an email. “Like in previous years, we’ll give our current associates the first opportunity to work additional hours if they want to earn extra money for the holidays. From there, we’ll strategically hire seasonal associates to help with the busy holiday season.”
The new jobs include seasonal store associates, as well as full-time truck drivers and customer care associates. The company also plans to offer additional hours to current employees.
Walmart stock rose 1.8% to $135.99 on Wednesday.
Walmart’s announcement spurred some nervousness over whether it meant the company was expecting a slower holiday season, and what it could mean for other retailers. Those jitters may not be wholly warranted, said D.A. Davidson analyst Michael Baker.
For one, it isn’t clear how many employees Walmart is entering the holidays with at a base level, Baker said. Labor shortages could have been a bigger problem for the company last year than this, allowing it to be less aggressive in staffing up as the year draws to a close, he added.
Still, analysts are expecting Walmart sales to be less strong than a year ago.
Walmart stock tanked earlier this summer after the company lowered its forecast for full-year profits, warning that while inflation was pushing up overall sales, it was also curbing consumers’ ability to spend on discretionary items. A few weeks later, Walmart said it would be eliminating about 200 corporate jobs. The stock staged a comeback after the company reported better-than-expected second-quarter earnings.
“Staffing levels are a little bit better and sales are not anticipated to be as robust, so each of those combined necessitate less hiring,” Baker said.
While overall retail sales may slow in 2022 compared to 2021, Baker continues to expect that the holiday season will be strong by historical standards. That said, retailers are facing a host of new challenges this holiday season, including rising inflation, a contracting economy, and lagging consumer sentiment. To top it off, many stores are struggling with excess inventory, which has forced them to offer discounts and take other steps to boost sales, threatening to cut into margins.
Holiday retail sales are expected to grow between 4% and 6% this year, according to Deloitte’s annual holiday forecast.
“The lower projected growth for the 2022 holiday season reflects the slowdown in the economy this year,” said Daniel Bachman, Deloitte’s U.S. economic forecaster, in a press release. “Retail sales are likely to be further affected by declining demand for durable consumer goods, which had been the centerpiece of pandemic spending.”
Write to Sabrina Escobar at [email protected]
