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Strained consumer spending and lingering worries over the U.S. economy are expected to hit the crucial shopping season, where sales are projected to grow at nearly half the pace as last year, according to research firms.
A Mastercard (NYSE:MA) report on Tuesday showed U.S. retail sales could rise 3.7% for the period beginning November through Dec. 24, compared with the 7.6% growth seen in 2022.
Last week, a report from career consultancy firm Challenger, Gray & Christmas showed that weaker spending coupled with increased labor costs would result in U.S. retailers hiring the lowest number of seasonal workers this year since 2008.
In 2022, Amazon.com (NASDAQ:AMZN) had announced plans to hire 150,000 employees across its operations for the holiday season, while retail bellwether Walmart (NYSE:WMT) had said it would add 40,000 workers in seasonal and full-time roles.
Macy’s (NYSE:M) said on Monday it would hire more than 38,000 full and part-time seasonal workers, fewer than the 41,000 workers it had announced to hire in 2022.
In a bid to draw shoppers, Target said it would start offering items under $25 across categories including apparel, home goods, and essentials and was hosting a “Deal of the Day” program starting October.
The program is its response to similar shopping events at retail giants such as Amazon, which is kicking off its second Prime Day for the year on Oct. 10-11, and Best Buy (NYSE:BBY), which is having a flash 48-hour sale on those days.
“With numerous choices and tightening budgets, you can anticipate shoppers to be increasingly selective and value-focused,” said Steve Sadove, senior adviser for Mastercard.
