The Holiday Tea Leaves

Editorial


The Holiday Tea Leaves
(Shutterstock)

As if you needed any, last week brought more evidence that Walmart Inc. of Bentonville is an economic bellwether.

The retail giant — the world’s largest company by revenue and employee count — released its holiday hiring plans last week. The headline number — 40,000 people — caused a few analysts to shudder.

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That’s because last year, amid record demand spurred by a pandemic, Walmart planned to hire 150,000 people, many of them permanently. Could the retailer be predicting a catastrophic drop in holiday spending in 2022, a year marked by record inflation and high energy prices?

Walmart, acknowledging the lower number versus last year, said fall 2022 found it better staffed than last year, lessening the need for more help. And retail consultant Carol Spieckerman told the Arkansas Democrat-Gazette said she could link the modest hiring to Walmart’s work to better automate stores and distribution centers and improve employee retention.

But consumers remain rocked by record inflation, and you can draw a direct line from that to Walmart and Target’s other plans, also announced last week, to roll out holiday shopping deals even earlier. According to The Associated Press, experts believe rapidly rising prices will drive Americans to shop early to spread out spending and to avoid paying higher prices by waiting. 

Walmart also says it’s offering deeper discounts on toys, home goods, electronics and beauty — some of which it’s already been putting on sale as cash-strapped shoppers have focused more on necessities like groceries.

Global consulting firm AlixPartners forecasts that holiday sales will be up 4% to 7% — an increase, but far below last year’s 16% spike. And at the current year-over-year inflation rate of 8.3%, that means retailers would see a decrease in real sales.

If you’re reading the tea leaves, that’s the bottom line. Retailers, large and small, may be working harder for less.