NEW YORK — Although the outlook for holiday retail sales is still somewhat uncertain, the nation’s two largest discount retailers, Walmart and Target Corp., are already gearing up aggressively to launch their seasonal campaigns well ahead of the normal holiday time frame.
While early evidence suggests a continued economic rebound in the third quarter, lingering questions, including COVID-19 and an ongoing deadlock over further stimulus funding, are creating uncertainty, according to Jack Kleinhenz, chief economist for the National Retail Federation (NRF). Writing in the NRF’s Monthly Economic Review, Kleinhenz compared forecasting this year’s holiday sales performance to assembling a jigsaw puzzle without all of the pieces.
“I am cautiously optimistic about the fourth quarter in terms of the economy and consumer spending, but the outlook is clouded with uncertainty pivoting on COVID-19 infection rates,” he writes. “The recession appears to be behind us, and the reopening of the economy over the past several months has created momentum that should carry through the fourth quarter. The test is whether consumer spending will be sustained amid wildcard puzzle pieces including policy surprises, the election and a resurgent virus.”
Possibly adding to the uncertainty is the recent news that President Trump and his wife have tested positive for COVID-19.
Kleinhenz points out that consumer spending has bounced back more quickly than expected, fueled in part by the federal government’s issuance of $1,200 stimulus checks and a temporary increase in unemployment benefits in the spring. But those programs have ended and Congress has thus far failed to reach agreement on further stimulus funding. Moreover, only about half of the 22.2 million jobs that were lost in March and April have been replaced.
Nonetheless, both Walmart and Target have announced plans to kick off their holiday campaigns early with increased seasonal hiring and promotions timed to draw out seasonal shopping and lessen store crowding. Walmart, for example, has analyzed its customers’ shopping behavior in recent months and expects an increase in online shopping, which has prompted the company to begin hiring more than 20,000 seasonal associates to work in its e-commerce fulfillment centers. The initiative follows the hiring of more than 500,000 associates since March.
“The holidays are always a special time, and this year we think the season will mean even more to our customers,” says Greg Smith, executive vice president of supply chain for Walmart U.S. “As more of them turn to online shopping, we want to ensure we’re staffed and ready to help deliver that special gift to their loved ones while continuing to fulfill our customers’ everyday needs.”
The world’s largest retailer is also tailoring its holiday product assortment in light of shopping trends and lifestyle changes visible over the past six months. For example, athleisure, loungewear and sleepwear as well as exercise equipment and outdoor grills will be featured, as well as an expanded array of pet products. Walmart is also bulking up its offerings in electronics and toys, with more than 1,300 new toys on offer.
Target, meanwhile, is also boosting its seasonal hiring and is also offering expanded hours to current team members. In view of the explosive growth of its e-commerce business, Target will double the number of store team members dedicated to contactless services such as Drive Up and Order Pickup.
Target is also revving up its promotional engine early.
“This year, in a holiday season unlike any other, we know it’s more important than ever for our guests to get great deals in a convenient and safe shopping environment,” says Christina Hennington, executive vice president and chief merchandising officer. “By kicking off our holiday deals earlier than ever, offering Black Friday pricing throughout the full month of November and extending our Price Match Guarantee, we’re letting guests know they don’t need to wait or face the crowds to get the best deals.”