With holiday season a couple of months away, retailers are already on a hiring spree to meet the festive rush. Needless to say, competition will be stiff whether it is brick-and-mortar stores or e-commerce platforms. As the season accounts for a sizeable chunk of yearly revenues and profits, retail bellwethers will go the extra mile to woo bargain hunters be it early-hour store openings, huge discounts, promotional strategies and free shipping on online purchases.
Certainly, retailers are deploying resources to enhance omni-channel capacities, introducing new brands, remodeling or refurbishing stores and expanding same-day delivery options to expedite the shopping process this holiday season. Additionally, the retailers are rationalizing supply chain, improving store-related technology and augmenting ship-from-store capabilities.
The retail landscape has been undergoing a fundamental change for quite some time now with technology playing a major role, as the focus shifts to online shopping thanks to growing dominance of Amazon (AMZN - Free Report) . As consumers shopping and spending pattern are changing, retailers are fast embracing the omni-channel mantra to provide a seamless shopping experience, whether in stores or online or through smartphones via apps.
Here Are the Hiring Plans
Retail giants such as Target (TGT - Free Report) and Gap (GPS - Free Report) have announced their hiring plans for the upcoming holiday season. Per media reports, Target intends to employ 1,20,000 associates, a 20% increase compared with the prior year. The company will deploy 7,500 people for its distribution center and fulfillment facilities. Gap is likely to appoint approximately 65,000 seasonal associates for its Gap, Banana Republic, Athleta and Old Navy stores.
Macy's (M - Free Report) intends to hire approximately 80,000 seasonal workers for its Macy’s and Bloomingdale’s stores, distribution centers, call centers and online fulfillment centers across the country. Around 23,500 people, up 5,500 from last year, will be hired for direct-to-consumer fulfillment facilities. Approximately 1,500 people will be hired for customer service centers and another 1,000 will be hired for Macy’s Thanksgiving Day parade and other major holiday events.
Economic Backdrop Indicates a Blissful Season
Americans look much more confident now courtesy of improving employment picture, tax reform and rising wages. Quite apparently, consumer spending — one of the pivotal factors driving the economy — is also likely to remain strong, unless arrested by a sharp spike in gasoline prices that might lower their propensity to consume. Meanwhile, the recent soft retail sales data for the month of August did raise concern.
Nevertheless, market pundits cited that slowing of retail sales may be a temporary blip, as the economy remains quite firm as of now. Moreover, per the National Retail Federation U.S. retail sales is likely to increase by at least 4.5% this year. According to the latest forecast by Kiplinger sales, excluding gasoline and autos, is expected to improve 5.1% in 2018 faring better than prior year’s increase of 4.2%. If all goes well, retailers are likely to witness a blissful holiday season.
The holiday season is nothing less than a battlefield for the retailers fighting hard to win over consumers. We believe that with the advent of the holiday season, the retail sector will hog all the attention. Here are few stocks for you which make promising bets for now.
We suggest investing in Urban Outfitters (URBN - Free Report) with a long-term earnings growth rate of 12% and a VGM Score of A. This lifestyle products and services company engaged in the retail and wholesale of general consumer products sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Another stock worth considering is DSW Inc. , which has a long-term earnings growth rate of 9%. This branded footwear and accessories retailer has a Zacks Rank #1 and a VGM Score of A.
Investors can also count on Zumiez (ZUMZ - Free Report) , which operates as a specialty retailer of apparel, footwear, accessories. This Zacks Rank #1 stock has a VGM Score of A.
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