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Will A.I. Boost Productivity? Companies Sure Hope So.

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Wendy’s menu boards. Ben & Jerry’s grocery store freezers. Abercrombie & Fitch’s marketing. Many mainstays of the American customer experience are increasingly powered by artificial intelligence.The question is whether the technology will actually make companies more efficient.Rapid productivity improvement is the dream for both companies and economic policymakers. If output per hour holds steady, firms must either sacrifice profits or raise prices to pay for wage increases or investment projects. But when firms figure out how to produce more per working hour, it means that they can maintain or expand profits even as they pay or invest more. Economies experiencing productivity booms can experience rapid wage gains and quick growth without as much risk of rapid inflation.But many economists and officials seem dubious that A.I. — especially generative A.I., which is still in its infancy — has spread enough to show up in productivity data already.Jerome H. Powell, the Federal Reserve chair, recently suggested that A.I. “may” have the potential to increase productivity growth, “but probably not in the short run.” John C. Williams, president of the New York Fed, has made similar remarks, specifically citing the work of the Northwestern University economist Robert Gordon.Mr. Gordon has argued that new technologies in recent years, while important, have probably not been transformative enough to give a lasting lift to productivity growth.“The enthusiasm about large language models and ChatGPT has gone a bit overboard,” he said in an interview.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Retailers’ Seasonal Hiring Plans Signal a Cooling Labor Market

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    After scrambling to fill out work forces in recent years, many companies are reporting more modest goals for temporary employment.As the most important selling season for retailers approaches, job applicants may feel a chill.Macy’s and Dick’s Sporting Goods plan to hire fewer seasonal workers after a surge in the past two years, when shoppers thronged to stores after pandemic lockdowns and employers struggled to keep up. Many retailers have dropped the incentives they used over the past few years to bring workers in the doors, such as signing or referral bonuses and steeper employee discounts.The career site Indeed said that searches for seasonal jobs were up 19 percent from last year, but that listed positions were down 6 percent. Companies helping businesses find temporary workers note that major retailers have been slower to release hiring plans this year. And on Indeed, fewer job postings are described as urgent needs.Seasonal hiring helps retailers handle the increased shopping during the fourth quarter, often referred to as “peak season.” Sales in November and December can account for a quarter of some retailers’ annual revenue. In the weeks leading up to Christmas, foot traffic in stores and online shopping are usually at their height.Early estimates point to an increase in retail spending this holiday season, but not at the fast pace of recent years.Some economists and consultants see the trends in hiring and pay as a sign that the red-hot labor market of the past couple of years has cooled. Retailers’ work forces, unsteady throughout the Covid-19 pandemic, are starting to stabilize. As inflation erodes shoppers’ budgets and confidence — and savings from pandemic relief programs are drawn down — the hiring plans may be part of a cautious approach that extends to inventories and sales projections.“The seasonal hiring market looks a whole lot more like 2019 than those pandemic bounce-back years,” said Nick Bunker, director of North American economic research for Indeed. “I really do think this is emblematic broadly of what we’re seeing in the U.S. labor market, where demand for workers overall is fairly strong but down from where it was in the last year and a half.”Macy’s is aiming to hire 38,000 workers, 3,000 below its 2022 plan. In 2021, Macy’s said it aimed to hire 76,000 people — in both permanent roles and seasonal jobs — during the holiday season. Of those positions, 48,000 were temporary.Dick’s said it would hire up to 8,600 seasonal workers, down from targets of 9,000 last year and 10,000 in 2021 — and up only slightly from 8,000 in 2019.“The seasonal hiring market looks a whole lot more like 2019 than those pandemic bounce-back years,” said Nick Bunker, an economic researcher at Indeed.Nam Y. Huh/Associated PressTarget and United Parcel Service plan to hire the same number of workers as last year, about 100,000 each. In a statement, Target said its seasonal associates would supplement the hiring it had done throughout the year to staff up its stores and supply chain facilities.“This year, we are starting the season with stability in our work force and a continued commitment to scheduling flexibility for our team, which has helped us retain team members and create a more experienced work force,” the company said in a post on its blog.Walmart, the nation’s biggest retailer, echoed that sentiment.“I’m also excited that we’re staffed and ready to serve customers this holiday season,” Maren Dollwet Waggoner, senior vice president of people at Walmart U.S., said in a post on LinkedIn. “We’ve been hiring throughout the year to be sure we’re ready to serve customers however they want to shop.”A Walmart spokeswoman added that if a store had additional staffing needs during the holiday season, it would offer extra hours to current employees before looking externally. Walmart did not say how many seasonal workers it planned to hire this year, as it did in years past. (In 2022, it said it was looking to fill 40,000 seasonal positions, including truck drivers and call center workers.)Amazon is a notable exception, saying it will hire more seasonal workers this year — 250,000, up from 150,000 last year. It also said that a $1.3 billion investment would bring the average hourly wage of those jobs to more than $20.50 and that it would still offer signing bonuses in some locations.Matching staffing to demand helps ensure that retailers eke out as many sales as they can.Seasonal workers are “the folks that are on the front lines of their business,” said John Long, North America retail sector leader at the consulting firm Korn Ferry, adding that aside from a store’s inventory, they “are going to be the make-or-break piece of the equation of whether the retailer makes their numbers or they don’t.”Amazon said it planned to hire 250,000 seasonal workers, up from 150,000 last year.Karsten Moran for The New York TimesAfter paring their work forces during the worst of the pandemic, employers in the retail and hospitality industries scrambled to fill open positions as workers sought more flexibility, switched companies frequently or stood on the sidelines. To get back to prepandemic staffing, retailers have used evergreen requisitions — continually displayed postings advertising essential roles that often need to be filled — and have started hiring seasonal workers as early as August.They have also given more hours to part-time workers and relaxed qualifications. To reduce turnover, many companies have bumped up their base wages for hourly positions.These factors have complicated the explanation for reduced seasonal hiring this year, said Melissa Hassett, a vice president at Manpower Group who works with large retailers, logistics and distributors across the country.“If you’re always hiring, you’re just not going to see an increase in postings happen very often,” she said. “So sometimes when you look at the increase in postings for retail it’s not as accurate as you think it is.”But there is also a feeling that the leverage of retail job applicants will fade.“In the past it felt like the workers had a lot more upper hand in terms of being able to demand what they need,” Yong Kim, founder of the staffing platform Wonolo, said. That dynamic has changed, especially for temporary positions.“There is definitely more tightening around companies wanting to hold off on hiring unless they really need to” and waiting to see how the fourth quarter pans out, Mr. Kim said. More

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    U.S. Consumers Are Showing Signs of Stress, Retailers Say

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    Consumer spending remains resilient, but retailers’ latest earnings offered a glimpse into worrying shifts in shopping habits.Consumers power the U.S. economy, and their capacity to spend has repeatedly defied predictions. In early 2020, after a short but severe recession caused by the pandemic, consumers splurged on big-ticket goods, from patio furniture to flat-screen TVs and home gym equipment. Then came what economists called “revenge spending,” with experiences that were off limits during lockdowns, like traveling and going to concerts, taking precedence.Now there are signs that some shoppers are becoming more cautious, as Americans’ savings erode, inflation continues to bite and other factors tighten their wallets — namely, the resumption of student loan payments in October. Financial reports from retailers — including Macy’s, Kohl’s, Foot Locker and Nordstrom — that landed this week suggest a shift is underway, from consumers buying with abandon to spending more on their needs.“Last year it was more psychological,” said Janine Stichter, a retail analyst at the brokerage firm BTIG. “But now that we’ve been dealing with inflation for as long as we have, I just think we’re getting to a point where savings are depleted.”In the aggregate, consumer spending remains solid. Retail sales in July were stronger than expected, leading some economists to raise their forecasts for economic growth this quarter. A robust labor market and rising wages have buoyed consumer confidence.But even retailers with strong sales say there are signs of economic strain among shoppers.“It is clear that the lower-income shopper, our core customer, is still under significant economic pressure,” Michael O’Sullivan, the chief executive of the off-price retailer Burlington Stores, said in a statement on Thursday. In the three months through July, Burlington’s sales rose 4 percent and its profit more than doubled.Discounters historically perform well during times of economic uncertainty as shoppers across the income spectrum look to save money. Burlington, along with Walmart, Dollar Tree and TJX, the owner of T.J. Maxx and Marshalls, all reported a rise in sales last quarter, as shoppers sought discounts on essential items like groceries, turned to cheaper private label products and reined in spending on discretionary goods.The strong performance at off-price and discount retailers stands in contrast to those at department store chains and many fashion and footwear retailers.In calls with Wall Street analysts this week, retail executives also flagged rising credit card delinquencies and higher rates of retail theft, ominous signs that consumers could be more strapped for cash.Jeff Gennette, the chief executive of Macy’s, the largest department store in the United States, said shoppers had “more aggressively pulled back” on spending in the discretionary categories, resulting in an overall decline in sales last quarter. Half of Macy’s shoppers make $75,000 or less.“They are not converting as easily and becoming more intentional on the allocation of their disposable income,” he said.“Probably the most important thing people are spending money on is general merchandise,” said Max Levchin, the chief executive of Affirm, which extends credit to shoppers at checkout via a so-called buy-now, pay-later model. “People are looking for more value for less money, or simpler functionality and lower price,” he said. The company reported an 18 percent rise in active customers from a year earlier.The finance chiefs of Macy’s, Kohl’s and Nordstrom told analysts that delinquencies on the department stores’ credit cards had risen. In Macy’s case, the increase in nonpayments last quarter was “faster than expected.”“When people are not paying their credit card bills, that suggests a really stretched consumer,” Ms. Stichter of BTIG said.And that means consumers are being more selective about where they shop and what they buy.“You’re going to see brands that are winners and losers,” Fran Horowitz, the chief executive of Abercrombie & Fitch, said in an interview. The fashion retailer reported a jump in sales of more than 10 percent last quarter, as it was able to “chase” the new styles that got more shoppers through the doors, Ms. Horowitz said.By contrast, on the same day Foot Locker reported a sales decline of nearly 10 percent for the quarter, it also cut its forecast for 2023 earnings for the second time this year, citing “ongoing consumer softness.”The back-to-school shopping season now underway is crucial for retailers, a harbinger of whether there will be strong sales for the rest of the year.And a new dynamic will soon come into play. In October, student loan payments will resume for about 44 million Americans, after a pandemic relief measure put them on hold in March 2020. Retail executives have warned that the payment resumption could further squeeze their shoppers’ budgets.Halloween, which is just weeks after repayments resume, will also be a barometer for people’s willingness to spend on discretionary items like costumes and candy, said Nikki Baird, vice president of strategy at Aptos, a technology company that works with retailers like Crocs, L.L. Bean and New Balance.She said that the repayments will most affect the age group that typically spends on Halloween. “I think that will really tell us what does this mean for the holiday season,” Ms. Baird said. “If Halloween is a bust, then I think we have to really start looking at whether consumers are going to go big for Christmas, because I think it says they won’t.” More

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    With Layoffs, Retailers Aim to Be Safe Rather Than Sorry (Again)

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    Companies that ramped up hiring in areas like technology over the past few years are cutting back as customers slow their spending.The retail industry is trying to figure out its correct size.Retailers, faced with sky-high demand from shoppers during the pandemic, spent the past three years ramping up their operations in areas like human resources, finance and technology. Now, times have changed.A public that rushed to buy all sorts of goods in the earlier parts of the pandemic is now spending less on merchandise like furniture and clothing. E-commerce, which boomed during lockdowns, has fallen from those heights. And with consumers worried about inflation in the prices of day-to-day necessities like food, companies are playing defense.Saks Off 5th, the off-price retailer owned by Hudson Bay, laid off an unspecified number of workers on Tuesday. Saks.com is laying off about 100 employees, or 3.5 percent of its workers. Stitch Fix laid off 20 percent of its salaried workers this month and closed a distribution center in Salt Lake City. Last week, Wayfair said it would lay off 1,750 people, or 10 percent of its work force, and Amazon started laying off 18,000 workers, many of them in its retail division. Bed Bath & Beyond cut its work force this month as it tries to shore up its finances and prepares for a possible bankruptcy filing.While it’s not unusual for major retailers to announce store closings and some job cuts after the blitz of the holiday season, the recent spate of layoffs is more about structural changes as the industry recalibrates itself after the rapid growth from pandemic-fueled shopping. And it accompanies broader worries about the state of the U.S. economy and layoffs by prominent tech companies.“Retailers are really being cognizant of capital preservation,” said Catherine Lepard, who leads the global retail market for the executive search firm Heidrick & Struggles. “They don’t know how long this cooler economy is going to last, and they want to make sure they have the right cash to get through that. For retailers that are struggling, it really means tightening the belt with some cost cutting.”Sales during the all-important holiday shopping season were weaker than in years past, when growth hit record levels. December retail sales increased 6 percent from the same period last year, but that number was not adjusted for inflation, which was at 6.5 percent.Department stores posted sizable sales declines. At Nordstrom, sales in the last nine weeks of 2022 decreased 3.5 percent from a year earlier, with the company noting that they “were softer than prepandemic levels.” Macy’s said its holiday sales had been on the lower end of its expectations.Macy’s holiday sales were on the lower end of expectations, the company said. Mathias Wasik for The New York TimesThe layoffs at certain retail companies are a sign that the industry is bracing for a slowdown and another change in how people shop.“To mitigate macroeconomic headwinds and best position our business for success, we have made changes to streamline our organizational structure,” Meghan Biango, a spokesperson for Saks Off 5th, said in a statement. “As part of this, we made the difficult decision to part ways with associates across various areas of the business.” The layoffs affected divisions such as talent acquisition and supply chain.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Walmart: The retail giant is significantly raising its starting wages for store workers, as it battles to recruit and retain workers in a tight retail labor market.Tech Layoffs: The industry’s recent job cuts have been an awakening for a generation of workers who have never experienced a cyclical crash.Infrastructure Money: Government spending on initiatives intended to combat climate change and rebuild infrastructure are expected to land this year. The effects on the labor market will be deep but hard to measure.Restaurant Workers: Mandatory $15 food-safety classes are turning cooks, waiters and bartenders into unwitting funders of a lobbying campaign against minimum wage increases.Not all retailers are in a defensive crouch. For instance, Walmart announced this week that it was raising the minimum wage for its store employees in a bid to attract and retain workers in a tight labor market.Still, some retailers are becoming focused less on bringing in new customers — an expensive undertaking — and more on retaining those they gained during the pandemic.“There’s a sense of conservatism,” said Brian Walker, chief strategy officer at Bloomreach, which works with retailers on their e-commerce and digital marketing businesses. “They’re still adjusting in many ways to this omnichannel retail environment and are probably seeing this as an important time to calibrate their organizations and make sure they have the right people, and not too many of them to be pragmatic and weather a potential storm.”That means fewer projects that require lots of money and time and more investments where a company can start seeing results quickly, Mr. Walker said.Ms. Lepard agreed. “This isn’t the economy to really get creative and take on high risk,” she said. “There might be a pulling back of some of that innovation in future investment to make sure they’re pacing themselves.”It’s also a moment for retailers to assess what e-commerce abilities they need. In the early months of the pandemic, online sales exploded as many brick-and-mortar stores went dark. That growth has slowed. E-commerce traffic in North America declined 1.6 percent in the third quarter of 2022 compared with a year earlier, according to Bloomreach’s Commerce Pulse data. Conversion rates — the measure of someone’s buying an item after seeing it advertised — dropped 12 percent during the same period.“This is where people overshot the runway,” said Craig Johnson, president of the retail advisory firm Customer Growth Partners, who has tracked the industry for 25 years. “This works like a ratchet. It might go up to 27 percent, but that’s going to normalize,” he added, referring to the share of total e-commerce spending for the first year of the pandemic, when many stores were grappling with Covid restrictions and closures.When online spending was rising, many companies pushed to fill roles that could help them meet the demand. Now they have to adjust to a new reality.“Unfortunately, along the way, we overcomplicated things, lost sight of some of our fundamentals and simply grew too big,” Niraj Shah, Wayfair’s chief executive, said in a note to employees last Friday. His company, which reported in November that its net revenue was down 9 percent from a year earlier, is looking to save $1.4 billion.Demand for luxury goods is still there, but those retailers say they need to restructure to continue to innovate.Mathias Wasik for The New York TimesIn the luxury sector, the shopper demand is still there, but a restructuring is needed to continue to innovate. As part of its layoffs, Saks.com also separated its technology and operations teams.“We are at a point in our trajectory as a digital luxury pure-play where we need to optimize our business to ensure we are best positioned for the future,” Nicole Schoenberg, a Saks spokeswoman, said in a statement. “These changes are never easy, but they are necessary for our go-forward success.”While reducing head count might help save costs in the short term, retailers will have trouble in the future if they do not also address how to improve the customer experience online, said Liza Amlani, founder of Retail Strategy Group, which works with brands on their merchandising and planning strategies.“With Wayfair, and as with many digital players, what we’ve seen in the last three years is that they scaled and grew too quickly,” Ms. Amlani said. “They banked on an influx of spending across digital. They didn’t invest where they needed to invest.”The retail layoffs are an about-face from 2021, when companies couldn’t hire frontline workers fast enough. After the initial jolt of the pandemic, which led many retailers to furlough or outright fire workers, many people received stimulus checks from the government. They wanted to spend that money, and when companies needed to ramp up in-store services again, they often struggled to find enough workers.Recalling that difficulty might give some retailers pause before they lay off workers this time, Mr. Walker said. If a steep downturn never comes, or if there’s a sudden rebound in demand, companies don’t want to be stuck without enough employees.But the next few months could be rough for retailers, as profit margins shrink and revenue growth slows from what it was the past couple of years. In that kind of environment, investors generally like to see large companies take steps to cut costs. And once layoffs begin, a kind of industry groupthink can set in.“Once a couple of companies start to do it,” said Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School who researches management and human resources, “then it creates some momentum where then you’ve got to explain why you’re not doing what everybody else is doing.” More

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    Black Friday Shoppers Worry About Economy as Retailers Push Sales

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    Black Friday deals returned, drawing shoppers back into stores, but inflation worries left many companies unsure what the holiday shopping season would look like.After two years of pandemic improvisation and in-store restrictions, this year’s Black Friday felt like a return to normalcy.Shoppers who ventured out on Friday, and even those who didn’t, saw a deluge of deals that had been missing the past couple of years. Many retailers pushed lower prices both in stores and online in response to Americans having recently shown they were more than willing to wait for a discount before making a purchase.“I think we’re going back to what we had before the pandemic with what we’re offering on Black Friday,” said Stephen Lebovitz, the chief executive officer of CBL Properties, which owns about 95 properties, including shopping centers and malls across the United States. “There are changes, but it’s going to feel a lot more like 2019 Black Friday than anything in the interim years.”Still, near-record inflation and dwindling savings kept some shoppers home and left retailers unsure what the season would ultimately bring.Many well-off consumers remain stable financially and appear ready to spend, but others face far more economic uncertainty. That isn’t expected to change anytime soon. Analysts, economists and retail executives are monitoring a potential economic slowdown in the first few months of 2023 that could worsen consumers’ wariness.That makes the holiday season — always the most important time for retailers — even more crucial this year.As the day began at Macy’s Herald Square, the department store’s flagship location in Manhattan, there was a steady flow of customers, and store employees clapped as people entered. Some said they were excited to shop but had concerns over prices.Shoppers who entered the flagship Macy’s location in Manhattan were greeted with applause from store employees.Mathias Wasik for The New York TimesTammy Freeman, 59, from New York, stood at the front of the line near the store’s main entrance, ready for her annual Black Friday excursion. She said that she was eager to buy various items, including a case for her daughter’s laptop, but noted that inflation was changing her general approach to spending.“I have to budget more,” she said. “I have to catch the sales more.”Eighty percent of holiday shoppers are likely to make a purchase from Black Friday through Cyber Monday, according to a survey from Bankrate. People shopping online pulled out their wallets on Thanksgiving Day as well, with sales up 2.9 percent compared with a year earlier, according to Adobe Analytics, which tracks online sales. Adobe estimated that online spending for the holiday season would increase 2.5 percent from last year. It said it had calculated that online prices were down 0.7 percent in October compared with last year, largely because of early holiday deals, though they rose 0.3 percent from September.On Friday, bargain-hunting shoppers definitely seemed to have the power. Stores posted signs advertising 50 to 60 percent off items. At a Target in Springfield, Ill., shoppers walked around with 65-inch televisions in shopping carts, and some wore matching T-shirts that said “Gather, gobble and shop.”In San Francisco’s Union Square, it was relatively quiet. By 7 a.m., when the line outside Macy’s had dissipated, it felt “more or less like a normal day,” said Clifford Cheng, a retail associate at the store.At a nearby Neiman Marcus, only about a dozen shoppers waited outside ahead of the store’s 9 a.m. opening. Natali Carrasco, 20, and Batechaa Steele, 20, were first-time Black Friday shoppers at the luxury department store.“We always come and shop here, but we always buy full price, so we wanted to see the sales,” Ms. Carrasco said.Shoppers have already cut back on some discretionary purchases, leaving many retailers with excess inventory.Nic Antaya for The New York TimesEven before the start of the season, some shoppers were already cutting back on discretionary purchases, leaving retailers with an unusually high level of inventory. They want to unload as much of that as possible before the start of the new year. “The more sales merchandise that they move through now the better,” said Kristen Gall, president of the online platform Rakuten, which offers cash-back deals. “Because if you get caught holding a lot of inventory in January and February and consumers pull back because things feel significantly more recessionary, that’s where the worry comes in for retailers.”Despite the economic unease shoppers have expressed, retailers said they were optimistic.“Even in really tough years Black Friday is a very strong day for us,” Jeff Gennette, Macy’s chief executive, said in an interview.And there were promising signs. Forty percent of consumers said they planned to shop in malls this holiday season, higher than the 35 percent of consumers who did during the 2019 Christmas season, before pandemic lockdowns, according to a survey from the consultancy KPMG. Last year, the number of shoppers who said they planned to venture inside a mall was 31 percent.Americans were also still purchasing gifts online. Adobe said online sales for Black Friday were expected to total $9 billion, up 1 percent year-over-year..Retailers took different approaches to entice shoppers to spend. Macy’s did not bring back the opening doorbuster deals — which went away during the pandemic amid social distancing guidelines — and instead offered sales throughout the day. It also continued the pandemic-era tradition of having Santa take photos with children while seated behind a desk, a sign that Covid concerns remain.J.C. Penney leaned back into doorbusters for the first time since 2019 because it said it wanted to motivate discount-focused shoppers to get out to stores. For its 5 a.m. doorbusters, the department store chain deliberately kept “pre-inflation pricing” on key items like Instant Pots, bath towels and boots. Signs in stores trumpeted 65 percent off discounts. Shoppers lined up outside the J.C. Penney in El Paso, Texas, before it opened at 5 a.m, on Friday.Justin Hamel for The New York Times“We think we’ll have a big volume of customers at the store, and to bring them in we know that value is very important to the consumer right now,” said Marc Rosen, J.C. Penney’s chief executive.On its website, the mall owner CBL highlighted the discounts that stores like H&M and the children’s apparel retailer Carter’s were offering. Other retailers employed a similar strategy in the days leading up to Black Friday. J. Crew on Monday advertised 50 percent off purchases. On Gap’s website, a large black banner scrolled atop the page saying “HPY BLK FRI” and highlighting 50 percent off deals with an additional 10 percent markdown.There are risks for retailers, however, in relying more heavily on deals. The practice erodes profit margins that buoyed them during the pandemic, when many Americans spent plenty on all sorts of goods and retailers did not feel the need to entice them with too many deals. There are also worries that shoppers will become so accustomed to sales that they will only buy when promised a lower price.“Consumers understanding that they can wait out discounts, coupled with retailers’ drive to move goods, likely means that this Black Friday will be more important than Black Friday has been in a long time,” Simeon Siegel, a managing director at BMO Capital Markets, said. “Whether that’s good for the brands, whether that’s good for the consumer — that’s a separate conversation.”Retailers are also competing more with entertainment options, like concerts and dining out at restaurants, than they have in the past couple of years. Consumers are expected to allocate a larger share of their holiday spending on experiences this year compared with last. The average amount that middle-income Americans, who make between $50,000 to $99,000 annually, spend on experiences is expected to increase 15 percent this year, according to a survey released in October from Deloitte.Of course, not every retailer places so much importance on Black Friday.The outdoor equipment retailer REI has remained closed on the day since 2015. This year, the company said it had decided to permanently give its workers a paid day off on Black Friday, encouraging them to spend time outside instead.But that was the exception. Even while the total sales for Black Friday were still being tallied, many retailers were already looking to further entice shoppers by rolling out advertisements for more discounts on Monday.“We believe that the consumer is quite aware of the fact that there’s plenty of inventory out there,” Richard Hayne, the chief executive of Urban Outfitters, said on a call with analysts this month. “And what they’re doing is waiting for big promotional events that normally occur on Black Friday and Cyber Monday in order to make their purchases.”Retailers may need to offer more deals, he said, but “I don’t believe it will be a total blood bath.”Isabella Simonetti More

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    The Holiday Shopping Season Is Here, but Is It Back?

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    The pandemic is not over but with the help of vaccinations and Covid-19 safety precautions, Santa Claus is feeling much better about coming to town this year.Stephen Arnold, president of the International Brotherhood of Real Bearded Santas, a trade group with more than 1,800 members, appeared at only a single tree lighting event last year. It was a frightening time, he said, particularly for a group of elderly men who are often overweight and have diabetes.But this season, Mr. Arnold said that all five of his tree lighting ceremonies are back, including a splashy event that he loves at Graceland, Elvis Presley’s estate in Mr. Arnold’s hometown, Memphis. He plans to participate in more than 200 appearances, on par with his prepandemic schedule in 2019. At times, he may perform from inside a life-size snow globe like last year, and a sizable chunk of his events will be held virtually, but it’s a world apart from 2020.“I think almost all of our Santas intend to work a great deal more than they did last year, and a much higher percentage, probably 65 to 70 percent of us, will return to what we consider some kind of normal schedule,” Mr. Arnold, 71, said. “I’m trying to be prepared for a season of relatively close contact.”And so it goes as the United States enters a holiday shopping season that is much more physically present than 2020, but not quite as carefree as it was prepandemic. People are more comfortable shopping at stores, but the number who return will likely vary by geography, and the employees will typically be wearing masks.The Macy’s Thanksgiving Day Parade was massively expanded, with more floats and a longer route, though children under 12 were not allowed to participate in the parade itself. Big chains will offer certain festivities, like Champagne bars, that were missing last year. Gift ideas and decorations will feature more prominently in stores as retailers anticipate more people browsing and planning bigger gatherings.Stephen Arnold was happy to be able to return to Graceland in Memphis as Santa last week.Houston Cofield for The New York TimesThis year promises to be different. “I’m trying to be prepared for a season of relatively close contact,” Mr. Arnold said.Houston Cofield for The New York Times“There’s a lot of pent-up energy to do things,” said Marie Driscoll, managing director of luxury and fashion at Coresight Research, an advisory and research firm. “Everything old is new again.”But hallmarks of a changed season remain. Many stores closed on Thanksgiving and holiday hours at certain malls and chains will be shortened, in part because of a national labor shortage. And many people are bracing for a dearth of products like popular toys as “supply chain issues” becomes the refrain of 2021. There are also those customers who will stay away from stores, based on new habits adopted during the pandemic or ongoing concerns about the virus, and opt to shop online or using curbside pickups.Ms. Driscoll said that signs of precautions would likely be visible throughout stores. “Retailers are going out of their way to make everybody feel comfortable, so at your own discretion you’re wearing a mask, there will be cleansers everywhere, there are options for self-checkout to not necessarily have to queue up and wait in lines,” she said..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The retail industry is still recovering from a plummet in store shoppers last year. In November and December 2020, foot traffic to department stores plunged more than 30 percent from the prior year, according to data from Vince Tibone, a senior analyst at Green Street, a real estate analytics firm. That picture seems to be improving, though, with department store foot traffic down 9 percent in October compared with October 2019, the data showed.Jeff Gennette, Macy’s chief executive, said in a recent interview that foot traffic at stores had recovered significantly from 2020 but remained down about 19 percent from 2019. The decline has been “stubborn,” he said, adding that the retailer expected it to improve in 2022.Shoppers may be returning, but they are also bracing for shortages because of supply chain issues.Jeenah Moon for The New York TimesTom Nolan, chief executive of Kendra Scott, a fashion jewelry business with 119 locations, said that in-store visits varied by region.“In the Northeast and West Coast, the numbers aren’t what they have been in Texas and the Southeast,” he said in an interview. While the chain’s sales were robust compared with 2019 or 2020, he noted that it was a boost for business when customers came in to browse, especially with family and friends.People are much more likely to make purchases when they’re at a store than while browsing the store’s website, said Meredith Darnall, senior vice president in the retail division of Brookfield Properties, which oversees more than 130 malls. “The ability to touch and see and talk to somebody about the product is real. They also have add-on sales — you come in for the T-shirt, you’re likely to buy the denim.” Adding to the appeal of in-store shopping for retailers, she said, is the fact that return rates are much higher for e-commerce purchases, especially in apparel and shoes.Plenty of consumers seem eager to shop in person this year. The NPD Group recently surveyed more than 1,000 people about holiday traditions that they missed most in 2020 and hoped to return to this year. About 36 percent said they missed browsing retail stores, while 30 percent said they looked forward to returning to shopping in malls and the “Thanksgiving and Black Friday frenzy.”The experience of shopping was drastically transformed last year as many people avoided lingering in stores and were discouraged from touching and testing products. Fitting rooms were closed or limited in many places. Makeup counters were not offering makeovers or samples of lipstick or perfume. Plastic partitions, hand sanitizer and reminders to socially distance peppered the landscape. Shopper events were downsized or canceled.Ralph Lauren offered a pop-up hot chocolate cart at Bloomingdale’s in Manhattan. Other retailers are back to offering drinks and snacks.Jeenah Moon for The New York TimesThis week, Saks Fifth Avenue unveiled its holiday window display and 10-story-tall light show at its New York flagship store. The retailer, which took a pause from its annual tradition of shutting down Fifth Avenue for a musical performance last year, returned to it this year with a performance by the Young People’s Chorus of New York City and an appearance from Michelle Obama. About 22 Nordstrom stores will have “immersive” photo booths.At the flagship Bloomingdale’s on 59th Street, the store is offering fewer events than the 400-plus it held in 2019, but many more than 2020, when its limited activities were held outdoors. There will be more food and drink for shoppers this season, including Champagne and cups of espresso, though they are being handled more carefully than in years past. The store hosted a performance by Bebe Rexha when it unveiled its holiday windows this month, but kept it to roughly 15 minutes and carefully managed capacity and spacing.“If you would have talked to me in 2019, we would have had elaborate spreads with caterers coming in and passed hors d’oeuvres and Champagne flowing,” said Frank Berman, Bloomingdale’s chief marketing officer. Now, the food is more likely to be prepackaged, and events like cooking demonstrations have been smaller.Still, he said, the retailer has been seeing a recent uptick in tourists and a growing willingness from shoppers to spend time wandering the store.Champagne and espresso are available to shoppers at Bloomingdale’s.Jeenah Moon for The New York Times“As it relates to Covid, they’re feeling safer, and you’re seeing more of that inspirational shopping, people going to make a day of it in our store,” Mr. Berman said. “They’re moving through the store and it’s not about, ‘I need to get this item and get out.’”There are also significant shifts in what people are buying compared to last year. Dressy clothing and luggage are popular again as people have resumed traveling and socializing. And the boom in pet adoptions has led to an explosion in clothing for dogs, which are welcome in the store, Mr. Berman said.The imprint of technology on physical retail has never been starker. Bloomingdale’s is still offering dozens of virtual events in addition to in-store activities. Shoppers now expect the ability to see whether products are in stock before they head to stores and for associates to help mail them, free of charge, when they’re not available, Ms. Driscoll of Coresight said.Nordstrom is among retailers using space at the front of its stores for shelves dedicated to online pickup, Ms. Darnall of Brookfield Properties said. Curbside pickup remains popular at malls and other big box stores.Photos with Santa were a rarity last year, but have largely returned.Jeenah Moon for The New York TimesAs for Santa Claus, Mr. Arnold is busier than ever as virtual visits add to his in-person gigs. Some parents prefer them after last year because the experience can be more magical once Santa is prepped by parents.“You have so much information, you become so real and have a real conversation,” he said. “Then you stop talking and solicit things from them, maybe about elves or reindeer or Mrs. Claus and what she bakes in the kitchen. Once in a while you get a hard question like, ‘Can you bring back Grandpa?’ and you try to wiggle your way out of that one.”Still, it is a rebuilding year.Mr. Arnold’s group, which had more than 2,000 members last year, shrank after many performers who could not or did not want to work in 2020 failed to renew their memberships. Mr. Arnold is confident in a robust return next year by the time of the International Santa Celebration event in Atlanta in April, which had been delayed by the pandemic.“You’re going to see the majority of Santas are going to feel like they’re returning to relatively normal conditions,” he said, adding that he was prepared with his vaccine and a booster. “And most of us who are smart enough will practice safety measures.” More

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    Why the Retail Industry Is Fighting Vaccine Mandates

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    The Biden administration has called on major companies to help fight the pandemic. Big chains want to get past the holiday staffing crunch first.The holiday shopping season has arrived, and retailers are ringing it in by doing everything from cutting prices to stocking showrooms to lure back customers who stayed at home last year. What the biggest of them are not doing is the one thing the White House and many public health experts have asked them to: mandate that their workers be vaccinated.As other industries with workers in public-facing roles, like airlines and hospitals, have moved toward requiring vaccines, retailers have dug in their heels, citing concerns about a labor shortage. And a portion of one of the country’s largest work forces will remain unvaccinated, just as shoppers are expected to flock to stores.At the heart of the retailers’ resistance is a worry about having enough people to work. In a tight labor market, retailers have been offering perks like higher wages and better hours to prospective employees in hopes of having enough people to staff their stores and distribution centers. The National Retail Federation, the industry’s largest trade group, has estimated that retailers will hire up to 665,000 seasonal workers this year.Walmart, the nation’s biggest private employer, declined to comment on its plans for vaccinations or testing.Eze Amos for The New York TimesMacy’s, for example, said it planned to hire 76,000 full- and part-time employees this season. The retailer has offered referral bonuses of up to $500 for each friend or relative whom employees recruit to join it. Macy’s asked corporate staff this fall to be vaccinated or test negative for Covid-19 to enter its offices. But store workers are a different story.“We have a lot of stores that have a lot of openings, and any ruling that we have to mandate those colleagues be vaccinated prior to Christmas is just going to exacerbate our labor shortage going into a really critical period for us,” Jeff Gennette, Macy’s chief executive, said in an interview.The industry showed how strongly it feels about the issue this month when the Biden administration directed companies with 100 or more workers to mandate vaccines or weekly tests by Jan. 4. Five days after that announcement, the National Retail Federation sued to stop the effort.“We all agree with the premise that vaccines are good and vaccines save lives,” Stephanie Martz, the chief administrative officer of the N.R.F., said in an interview Monday.“But by the same token, you can’t just say, ‘OK, make it so.’”The order is now held up in litigation, challenged by a number of lawsuits from a broad coalition of opponents, and could make its way to the Supreme Court. Court filings by the administration warn that blocking the rule would “likely cost dozens or even hundreds of lives per day.”Mr. Gennette, who sits on the board of the federation, said Macy’s would “love to see” the order put in place in the first quarter, which typically begins in February for the industry. That echoes the federation, which has said it wants to move the deadline back several months.“I support it — I would just love to have it on a timetable that works for us,” Mr. Gennette said. “We need more time.”Jeff Gennette, Macy’s chief executive, said he believed in the importance of employee vaccinations but didn’t want them required until after the holidays.Jeenah Moon for The New York TimesMany health experts say employee mandates are the only way to help the country emerge from the pandemic, as rampant misinformation and politicization of the coronavirus have helped suppress vaccination rates. The vaccination rate for those 12 and older in the United States is about 69 percent, with rates in some pockets of the country as low as 40 percent. Average daily case reports have increased more than 20 percent over the past two weeks.“It’s a pretty big ask, there’s no one denying that,” Crystal Watson, a senior scholar at the Center for Health Security at Johns Hopkins University, said of requiring vaccinations for retail employees. “But we’ve also tried a lot of other things to help people get vaccinated — and I think a mandate right now is what we need to get over that barrier.”Walmart, the nation’s biggest private employer, declined to comment on the federation’s lawsuit or its plans for vaccinations or testing. A spokeswoman for Target said the company had “started taking the necessary steps to meet the requirements of the new Covid-19 rules for large companies as soon as the details were announced.”Spokespeople for several retailers on the federation’s board, including Kohl’s, Dick’s Sporting Goods and Saks, declined to comment for this article.Concern about challenges in hiring workers is a major cause of retailers’ hesitancy.Jim Wilson/The New York Times“I think employers are embarrassed and ashamed by what they are objecting to and therefore use the N.R.F. as a cover,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union.He added: “If you had a choice of going to a workplace, or as a customer to go to a store, that said, ‘All our employees are vaccinated or tested,’ or another store that says, ‘We have no idea who’s vaccinated or tested,’ which would you choose? And that’s why, let’s say, Acme Department Store doesn’t want to advertise that it’s promoting bad public policy.”Many employers in industries, like retail, that have mandated vaccines at corporate offices have not required them for frontline workers, sharing concerns about challenges in hiring. But those workers, including about four million at stores, are among the most vulnerable. They interact frequently with the public and are less likely to be vaccinated themselves. Mandates at Tyson, United Airlines and several health care companies indicate that when faced with the prospect of losing their job, employees most frequently choose inoculation.“We know vaccine requirements work,” said Kevin Munoz, a spokesman for the White House. “The federal government, the country’s largest employer, has successfully implemented its requirement in a way that has boosted vaccinations and avoids any disruptions to operations.”.css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Still, companies mandating vaccines have faced protests or lawsuits. In some states litigation has been passed to impede it. Disney, for instance, paused a mandate for employees at Disney World in Florida after it became illegal for employers in the state to require workers to get the shot.The panic and precautions tied to Covid-19 have played out at retail stores throughout the pandemic and ensnared their workers.First, there was the divide between essential and nonessential businesses, which prompted chains like Guitar Center and Dillard’s to argue that they needed to stay open — and keep their employees coming in — despite the worsening public health crisis. Workers have been at the forefront of disputes around mask mandates and then mask enforcement. Retail chains like REI have been criticized for failing to inform employees about Covid cases in stores. Grocery store workers were not given priority access to vaccines in many states.Target’s chief executive attributed strong staffing numbers to perks and safety measures.Amr Alfiky/The New York Times“We’ve seen, throughout the pandemic, self-serving messages from employers who are putting profitability above their own employees’ health and safety,” Mr. Appelbaum said. “They have a misguided idea that it’s better for profits to take certain actions.”Business has boomed for some of the largest retailers, like Target and Walmart, throughout the pandemic. And while they are still facing rising prices and supply chain strain, executives have indicated recently that pressure on staffing has waned.“We feel really good about our staffing going into the holiday season,” Brian Cornell, Target’s chief executive, told CNBC last week. He added that the company’s retention numbers were “some of the strongest in our history,” which he attributed to perks and safety measures.Retailers are betting that consumers will be comfortable shopping in stores, where foot traffic is already higher than in 2020, regardless of the industry’s efforts to fight the new vaccination and testing requirements. And for those who are concerned about the lack of vaccinations, the companies have bolstered their e-commerce operations and curbside pickup offerings in the past year, though in-store shopping often leads to more purchases and fewer returns.When asked what Macy’s would tell concerned customers about shopping in stores, Mr. Gennette said: “What I would say is we encourage every one of our colleagues to be vaccinated and every colleague wears a mask in our stores and warehouses to protect themselves and others.”Last week, a number of health groups and experts, including the American Medical Association and the American College of Physicians, put out a statement imploring companies to move forward with the Labor Department rules.“The hope was to provide some perspective for business leaders to remind them this is not a political issue,” said Dr. Ashish K. Jha, dean of the Brown University School of Public Health, who was one of the signatories. Dr. Jha said it was important for companies in all industries to follow the rule, noting that retailers play a particular role, given the nature of their employee base. He said those measures should be put in place during the holiday season — not after — especially as that is when case numbers are expected to rise.“Do they really want to be superspreader places during the holiday season and be responsible for their employees getting sick and for their employees spreading it to customers?” Dr. Jha said. More

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    Retailers Scramble to Attract Workers Ahead of the Holidays

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    Signing bonuses, higher wages, even college tuition. Companies are using perks to entice new employees in an industry that has been battered by the pandemic.Macy’s is offering referral bonuses of up to $500 for each friend or family member that employees recruit to join the company. Walmart is paying as much as $17 an hour to start and has begun offering free college tuition to its workers. And some Amazon warehouse jobs now command signing bonuses of up to $3,000.Retailers, expecting the holiday shopping season to be bustling once again this year after being upended by the coronavirus in 2020, are scrambling to find enough workers to staff their stores and distribution centers in a tight labor market. It is not proving easy to entice applicants to an industry that has been battered, more than most, by the pandemic’s many challenges, from fights over mask wearing to high rates of infection among employees. Willing retail workers are likely to earn larger paychecks and work fewer hours, while consumers may be greeted by less inventory and understaffed stores.“Folks looking to work in retail have typically had very little choice — it’s largely been driven by geography and availability of hours,” said Mark A. Cohen, the director of retail studies at Columbia University’s business school. “Now they can pick and choose who’s got the highest, best benefits, bonuses and hourly rates. And as we’ve seen, the escalation has been striking.”Or as Jeff Gennette, the chief executive of Macy’s, which plans to hire 76,000 full- and part-time employees this season, put it in a recent interview: “Everyone’s experiencing this — there’s a war for talent at the front lines. My sense is we all have to raise our game.”While some of the most generous perks, like tuition reimbursement, are being offered mainly to long-term workers, even seasonal workers will see higher pay than usual. It’s especially critical for retailers to hire temporary help this year because existing employees are already strained from nearly two years of pandemic conditions. The National Retail Federation, an industry group, is anticipating record holiday sales and has forecast that retailers will hire 500,000 to 665,000 seasonal workers, significantly more than the 486,000 in 2020.It’s especially critical for retailers to hire temporary help this year to assist existing employees already strained from nearly two years of pandemic conditions.Jeenah Moon for The New York Times“The biggest risk to retailers and distributors is that they are working their current work force too much,” said Scott Mushkin, who founded the financial consultant R5 Capital, based in New Canaan, Conn. “Overtime can only go so far. The work force is tired out.”Mr. Mushkin experienced firsthand just how eager retailers are for workers during a visit last month to a Home Depot in Naperville, Ill.“I was looking at a sign listing open positions at the store when I was basically accosted by a manager asking if I was interested in applying,” Mr. Mushkin said.Mr. Mushkin said he was struck not only by the manager’s desperation but also by the number of positions available. “Basically every job in that store is open,” he said. “So who is doing those jobs now? Who is picking up the slack?”Those pressures may explain why large retailers like Walmart are looking to hire 150,000 additional workers to supplement its current staff this season. For several years leading up to the pandemic, Walmart offered existing workers extra hours at the holidays but did not start a large hiring blitz. (Existing employees can still sign up for additional hours.) It recently raised its minimum wage to $12 an hour, and in some stores it is offering new workers $17 an hour.A recruiter for Amazon at a job fair in Virginia last month. It is looking for an additional 150,000 people this holiday season.Andrew Caballero-Reynolds/Agence France-Presse — Getty ImagesAmazon is also looking for an additional 150,000 people this holiday season, which follows a push to expand its permanent work force by 125,000. With giant retailers gobbling up many of the job candidates, enticing new employees is that much harder for others.Many retailers, like Saks Off 5th, reiterated commitments to remain closed on Thanksgiving this year, a welcome shift for workers after a yearslong trend of shopping invading the holiday. Demanding that employees work in stores that day would probably be a particularly tough sell this year.Nordstrom, which is aiming to hire 28,600 seasonal and regular employees, said it had increased bonus and incentive pay to as much as $650 for hourly and overnight store workers, from as much as $400 last year.Saks Off 5th said in October that it was raising its minimum base wage for hourly store workers to $15 per hour — more than double the federal minimum wage — and that it would not offer extended holiday shopping hours this year so that staff could have more flexibility.Best Buy is allowing job applicants to submit videos rather than coming in physically for a first round of interviews, saying in a recent statement that the videos “can be recorded and reviewed without the need to go back and forth on scheduling.”The scramble by retailers comes as the American economy is gaining strength, adding 531,000 jobs in October, a sharp rebound from the previous month. But even as unemployment dropped to 4.6 percent from 4.8 percent, the labor participation rate — which measures the share of the working-age population employed or looking for a job — was flat last month, at 61.6 percent. That signals that the pool of available workers remains tight.“We’re coming out of a crisis we have no experience in dealing with, in which millions of people were furloughed or laid off or removed from the work force, and to think they’ll all show up on certain date to come back to work is kind of silly,” Mr. Cohen said. “Some people are still fearful about coming back to work, especially in a job in which they would be exposed to large numbers of the public.”While fear of the Delta variant may be keeping some workers away, the retail industry had been loath to impose vaccine mandates for fear that store workers might leave and that it might become even harder to find seasonal employees. A new vaccinate-or-test requirement for companies with 100 or more employees announced by the Biden administration on Thursday essentially forced their hands, though it is not scheduled to take effect until Jan. 4 and was temporarily blocked on Saturday by a federal appeals court in Louisiana. (The mandate does instruct employers to require unvaccinated workers to wear masks by Dec. 5.)The National Retail Federation was critical of the mandate, saying it imposes “burdensome new requirements on retailers during the crucial holiday shopping season.”L.L. Bean’s chief executive said that it has been “incredibly challenging” to hire hourly employees, especially for its 54 stores.Karsten Moran for The New York TimesStephen Smith, the chief executive of L.L. Bean, the outdoor retailer based in Maine, said it has been “incredibly challenging” to hire hourly employees, especially for its more than 50 stores. The chain is not offering bonuses, but it has given priority to new forms of flexibility to attract workers. For example, jobs at its domestic call center are now fully remote.In stores, Mr. Smith said, “we have changed our shift structure so you can do two- or four-hour shifts” in an attempt to “make it a lot easier if you’re juggling family responsibilities.”The company has also sought to emphasize its unique benefits, including several paid days off for employees to pursue outdoor experiences.The challenge of finding workers has put a spotlight on how difficult many retail jobs are and on the short shrift given to many store workers during the worst of the pandemic. They were regularly exposed to Covid-19 and involved in customer conflicts around wearing masks, and they were inconsistently offered hazard pay or other compensation for their efforts. Many retail workers said that they were not properly informed when they were exposed to the virus in stores.Anthony Stropoli, a personal shopper at Bergdorf Goodman, holds one of the lucrative, client-facing jobs that have been fading in retail in recent years and he noted that luxury retail was a different ballgame. He previously worked at Barneys New York, which filed for bankruptcy in 2019.“A lot of people do not want to work in retail right now — I really, really see it,” Mr. Stropoli said. “People are not feeling appreciated or fairly compensated, and I think this whole Covid thing has made them really rethink that. They want to feel valued.”It all means that workers have more leverage this season than they have in the past. Joel Bines, global co-leader of the retail practice at the consulting firm AlixPartners, said if retailers want to find enough workers this season, they need to pay them more and fundamentally improve working conditions.“For retailers, who have treated their workers as dispensable cogs in order to increase the bottom line, to say they are shocked that they can’t find people to work for them is hard to believe,” Mr. Bines said.“The thing that the industry needs to realize is that workers have agency now,” he added. “They have agency in a way they never have before.”Contact Sapna Maheshwari at sapna@nytimes.com and Michael Corkery at michael.corkery@nytimes.com. More

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    Retailers’ Latest Headache: Shutdowns at Their Vietnamese Suppliers

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    Factories in the country, a major apparel and footwear supplier to the U.S., have been forced by the pandemic to close or operate at reduced capacity, complicating the all-important holiday season.After a bruising 18 months of the pandemic, this fall represented a fresh start for the apparel company Everlane. It was preparing to release a slew of new products, with September marking the beginning of an ambitious marketing campaign around its denim.Instead, Everlane has spent this month scrambling just to get jeans — along with other products like bags and shoes — out of Vietnam, where a surge in coronavirus cases has forced factories to either close or operate at severely reduced capacity with staff living in on-site bubbles.“At this point, we have factories in 100 percent lockdown,” Michael Preysman, Everlane’s chief executive, said in an interview. “Do we fly things over? Do we move things? Do we adjust in the factory? It’s a nonstop game of Tetris.”The crisis in Vietnam, which has grown in recent years to become the second-biggest supplier of apparel and footwear to the United States after China, is the latest curveball to be tossed at the retail industry, which has been battered by the pandemic. Vietnam made it through the first part of the pandemic relatively unscathed, but now the Delta variant of the coronavirus is on a rampage, highlighting the uneven distribution of vaccines globally and the perils that new outbreaks pose to the world’s economy.With the holiday season fast approaching, many American retailers are anticipating delays and shortages of goods, along with higher prices tied to labor and already skyrocketing shipping costs. Everlane said it was facing delays of four to eight weeks, depending on when factories it worked with in Vietnam had closed. Nike cut its sales forecast last week, citing the loss of 10 weeks of production in Vietnam since mid-July and reopenings set to start in phases in October.The apparel company Everlane said that 40 percent of its wares came from Vietnam.Justin Kaneps for The New York Times“We weren’t anticipating a full lockdown,” said Jana Gold, a senior director with Alvarez & Marsal’s consumer and retail group, who has been helping retailers with supply chain issues. “We’re going to continue to see a high demand for goods from highly vaccinated countries or regions, but who are getting the goods from highly unvaccinated countries that could be struggling.”The logjam has put a spotlight on Vietnam’s key role in outfitting American consumers. Many retailers moved their manufacturing to the country from China over the past decade because of rising costs. New tariffs on China instituted under former President Donald J. Trump accelerated the shift.Contract factories in Vietnam manufactured 51 percent of total Nike brand footwear last year. Lululemon and Gap, which also owns Old Navy, have said a third of their merchandise comes from factories in Vietnam. Everlane said the country supplies 40 percent of its wares.As the coronavirus tore across the globe, Vietnam was hailed as a bright spot for its rock-bottom caseload and strong economy. Over 15 months, only 3,000 infections and 15 deaths were reported in the country. But during the summer, the Delta variant erupted among a population that was almost entirely unvaccinated. Now, the caseload has surged past 766,000 and the death toll is nearing 19,000.The densely packed industrial hub of Ho Chi Minh City, the country’s virus epicenter, has experienced a series of increasingly stringent lockdowns, with many factories temporarily closing in July. That paralyzed commercial activity and added stress to a strained global supply chain. Although new cases have started to decline, the government extended the lockdown through the end of September, as it struggles to vaccinate its residents.People waiting to receive their vaccination in Hanoi, Vietnam, this month.Linh Pham/Getty ImagesAt the beginning of September, only 3.3 percent of the country’s population was fully vaccinated, while 15.4 percent had received one shot.The American apparel and footwear industry has asked the Vietnamese government to prioritize shots among factory workers. Executives from roughly 90 companies, including Nike and Fruit of the Loom, asked the Biden administration in a letter in mid-August to accelerate vaccine donations, saying that “​​the health of our industry is directly dependent on the health of Vietnam’s industry.” The group said the industry employed about three million U.S. workers.On a visit to Vietnam last month, Vice President Kamala Harris said the United States would send an additional one million vaccine doses, on top of the five million already donated, along with $23 million in emergency aid and 77 freezers to store the vaccine.“The situation in Vietnam is exactly why we need to be accelerating our efforts to provide donations of vaccines around the world,” said Steve Lamar, president of the American Apparel & Footwear Association, a trade group. Retailers have been setting up vaccination sites at factories to help administer shots once doses are obtained and are trying to keep manufacturing going through “three-in-one place” policy, where workers eat, sleep and work at factories, he said.According to the latest figures from the government, nearly everyone in Ho Chi Minh City has received the first shot.A garment factory in Hanoi in January, before the lockdown.Kham/ReutersJason Chen, chairman and founder of Singtex, a garment factory owner, said last week that the company’s 350-person factory in Binh Duong Province was down to 80 people, who were living on the premises to comply with government restrictions. The factory erected a tent to serve dinner to workers and has been shifting some retail orders to Singtex’s factories in Taiwan. Mr. Chen said he was prepared for the Vietnamese factories to remain closed until November.“This year in the U.S.A., everybody wants to go shopping,” Mr. Chen said. “Some goods cannot be delivered in the right time. So it really will affect the holiday.”He added that administrators at the factory were calling workers who were in lockdown to see if they needed financial and other assistance. But many are struggling.Le Quoc Khanh, 40, who assembles electronic home appliances at Saigon Hi-Tech Park, said the rigidity of the government lockdown had been “very hard” for him and his wife, who have three small children and rent their home in Ho Chi Minh City. His employer is not yet able to bring him back, even though he is vaccinated, and he said he had been forced to borrow money at high interest rates to pay for electricity, diapers and food.“On Sept. 15, when I heard that anyone who had two doses could go to work, my wife and I were so happy that we burst into tears, but now the government says to wait until the end of September,” he said. “My wife and I are so worried. It’s like we are sitting on fire — we really need money for living now.”The pandemic’s continuing impact on crucial supply chains may have a longer-lasting impact on future investment decisions in Vietnam and other emerging economies. Companies choosing where to invest abroad have always evaluated a broad slate of conditions, like taxes, regulatory requirements and labor force availability.“All of a sudden, they have to start thinking about the public health response,” said Chad P. Brown, an economist at the Peterson Institute for International Economics. Huong Le Thu, a senior analyst at the Australian Strategic Policy Institute, added: “The Delta wave is just one of the variants. Vietnam, just like other countries, will have to prepare for the long game and potentially more outbreaks even after mass vaccination.”Hoping that restrictions will be eased in October, some factories in Ho Chi Minh City that have been closed since July are preparing to resume production.At the moment, though, American companies are looking outside Vietnam, often returning to Chinese factories that they worked with previously or finding partners in other countries that are not in the middle of a surge.Whether they will have enough time to shift before the holidays is questionable. “September is a bad time to reposition things,” said Gordon Hanson, an economist and urban policy professor at Harvard Kennedy School.Vietnam has been a regular topic on recent earnings calls for retailers, and concerns have probably ballooned as reopenings have been pushed. Adidas, based in Germany, said last month that delays that started with closings in mid-July were among issues that could cost the company more than 500 million euros in sales in the second half of the year.Restoration Hardware cited the shutdowns as a key factor in its decision to push the introduction of a new collection to next spring and to delay fall catalogs. Urban Outfitters said that while it would normally replenish best-selling products during the holiday season, its top concern now was simply getting products into the United States.The outbreak emerged just as the United States appeared to be regaining its economic footing and retailers were seeing a rebound in sales after a difficult 2020.Gihan Amarasiriwardena, right, with his Ministry of Supply co-founder Aman Advani, said the brand had paid about $1.50 per $125 shirt in transportation costs before the pandemic. Now, the cost is nearly $6.Tony Luong for The New York Times“In mid-June, the world looked like a pretty good place, at least in the U.S., and we anticipated this great recovery and here we are,” said Gihan Amarasiriwardena, president and co-founder of Ministry of Supply, a small apparel brand.Production delays aren’t the only problem. Ocean freight costs have soared during the pandemic, ports are crowded and demand for air shipping has jumped so significantly that Ms. Gold of Alvarez & Marsal said some retailers had chartered their own airplanes to transport goods.Since last year, the cost of shipping a container from East Asia to the West Coast of North America has leapt to $20,000 from $4,000, according to the transportation company FreightCo.Mr. Amarasiriwardena said Ministry of Supply had paid about $1.50 in transportation costs for a $125 shirt before the pandemic. Now, the cost is nearly $6 per shirt.Macy’s chief executive, Jeff Gennette, said, “This is the one keeping me up at night,” referring to supply chain issues at ports and in Vietnam. For the company, “it’s a bigger potential problem in the near term than where Covid is right now,” he said.Retailers are already trying to prepare customers. L.L. Bean just added a banner to its website warning customers about holiday shipping delays and shortages and urging early shopping. Stephen Smith, the company’s chief executive, said that the messaging was “unprecedented” for mid-September and that the company normally started talking about holiday orders and shipping cutoffs “deep into October or even November.”Mr. Preysman of Everlane said he anticipated that the supply chain would not rebound to its prepandemic health for several years.“You have to live in a new normal where the stability of 2019 doesn’t come back for three to five years,” he said. “This is going to take a long time to sort out.”Chau Doan More