Walmart Inc. is bringing fewer associates into the family for the holiday season — looking to hire just 40,000 U.S. workers as opposed to the 150,000 it sought last year.
The sharp reduction highlights just how rampant inflation and the threat of a recession are hurting discount consumers and the retailers that cater to them.
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“Following on from job cuts at several retailers, this is the latest signal that the retail sector is going through a weaker period following the boom of 2021,” said Neil Saunders, managing director of GlobalData.
Saunders said the hiring slowdown reflected the drop in consumer demand, the lesser demands of a holiday season that’s more spread out and profit considerations.
“Overall, holiday sales won’t be terrible this year, but a lot of growth will be driven by inflation and underlying volumes will be down in many categories,” he said.
Walmart — the nation’s largest private employer with a total of 2.3 million people on its payrolls — is playing it safe.
Maren Waggoner, senior vice president of field people, Walmart U.S., made a pitch for new workers in a post on the company’s website.
“We get to play a special part in helping millions of families across the country bring the holidays to life,” Waggoner said. “From all the hottest gifts to holiday meals and decorations, for many families, the holidays begin at Walmart.”
The company is looking for:
Seasonal store associates.
Full-time, permanent truck drivers.
Customer Care associates at call centers.
Walmart and other retailers have had to work harder to bring in workers, with many people reevaluating work-life balance over the pandemic and demanding more.
The discounter has boosted its employee benefits and is now offering a U.S. wage that averages over $17 an hour.
The company also touts entry-level jobs as the start of a potentially promising career path.
“Seventy-five percent of our U.S. salaried management team in stores, clubs and supply chain began their careers as hourly associates, including our CEO [chief executive officer] Doug McMillon and Walmart U.S. CEO John Furner,” Waggoner said.
In July, Walmart shocked investors with a profit warning that reflected inflation and the choices many consumers were making — prioritizing food spending over general merchandise categories, prompting markdowns, particularly in apparel.
And the trend has continued.
August food prices rose 11.4 percent from a year ago as the price on all goods and services increased 8.3 percent and apparel lagged, with a 5.1 percent rise, according to the U.S. Bureau of Labor Statistics.
Inflation could, in a sense, eat retail’s Christmas.
AlixPartners, for instance, recently forecast a 4 to 7 percent increase in holiday sales — growth that is below the current rate of inflation and would therefore produce a decrease in “real” sales.