By Andria Cheng
NEW YORK--While the presidential election, the pending fiscal
cliff and modest job growth are creating uncertainty over how much
consumers may open their wallets this holiday season, retailers so
far are feeling pretty optimistic.
A survey of 14 retailers, including specialty clothing retailers
Ann Inc. (ANN), Hot Topic Inc. (HOTT) and Chico's FAS Inc. (CHS),
showed 75% of them forecast an increase in holiday sales this year,
compared to 68% last year and the highest percentage since 2008,
according to a report released on Monday by consulting firm Hay
Group, which conducted the survey in August and September.
In an encouraging sign for the still weak job market after the
Labor Department on Friday reported a sharp slowdown in August job
growth, 36% of the retailers said they plan to hire more employees
this holiday season, compared to 10% last year and the highest
percentage since 2007, the first year when the survey began.
The retail and health-care industries are the top two
private-sector employers in the U.S., according to Labor Department
data. Discounter Wal-Mart Stores Inc. (WMT) is the largest
private-sector employer.
In other good news, the survey showed that the ratio of
permanent to seasonal employees retailers plan to have jumped to
43% from 19% last year and was the highest in at least four
years.
"All things considered, retailers are on the 'nice list' this
year," said Maryam Morse, a leader of Hay Group's retail practice.
"With sales improving, retailers are placing more emphasis on
retaining and rewarding employees beyond the holiday season."
While promotions are expected to continue to define holiday
selling, retailers also are controlling inventory better and
fine-tuning their promotions to reduce profit-eroding
discounts.
As a result of that, retailers are planning to spread out their
promotions with 31% of them seeking to begin their holiday
promotions even earlier this year, compared to 22% last year. Among
those who plan their promotions earlier, more than two-fifths will
unleash their marketing ammunition in October, according to the
survey.
The survey also showed retailers are more at ease in the face of
stiff online competition and a still uncertain economic
environment.
For instance, some of the survey's new questions this year
showed only 18% of retailers said they feel pressure to match
online-only prices while half of retailers said they plan to cut
back on overall discounting this year. Only 8% of them said they
will staff stores to be open 24 hours on select dates throughout
the holidays.
"The mood is positive," said luxury retailer Saks Inc. (SKS)
Chief Executive Steve Sadove in an interview. "There's some malaise
in the economic environment. But the fashion world is alive and
well. The customers are shopping. The trend is very healthy. We are
in a decent environment."
Write to Andria Cheng at acheng@marketwatch.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires