Best Buy cuts holiday hiring by half
NEW YORK (Reuters) - Best Buy Co, the world's largest consumer electronics chain, will cut its hiring of temporary workers in the United States this holiday season by almost half compared with 2010.
The decision is further bad news for the U.S. economy and for the unemployed in particular. A quarter of the retailers surveyed by the Hay Group said they were hiring fewer seasonal workers this year and only 10 percent plan to hire more.
Best Buy is hiring only 15,000 seasonal workers this year, down from 29,000 last year, and is counting on permanent employees to work overtime to close the gap in terms of hours worked, Chief Executive Brian Dunn told Reuters in an interview on Tuesday.
He said the retailer is not counting on any help from the economy this Christmas as it sees consumers staying cautious about spending on nonessential items.
"Our plan isn't built or predicated upon a meaningful move in the economic environment," Dunn said, adding he was "cautiously optimistic" about demand levels this season.
"The consumer is being really careful about where he or she is spending the dollars, and I think that will continue through the holidays," he said.
Best Buy is counting on competitive pricing, new products like the Apple iPhone 5 and more digital and mobile advertising to bring shoppers through the door.
The efforts come as the retailer tries to make this holiday season different from the last one, when misplaced bets on items like pricey 3D televisions led to disappointing sales and earnings.
The holiday season is the biggest selling period of the year for retailers, and consumer spending accounts for about 70 percent of the U.S. economy.
To woo budget-conscious shoppers, Best Buy is promising to match any lower prices its brick-and-mortar rivals offer from November 13 through December 24, the peak of the holiday shopping season. The offer excludes the period from Thanksgiving Day on November 24 through "Cyber Monday" on November 28.
"We are mindful that people are very interested in great value," said Dunn, who expects accessories under $100, smartphones and tablets to be big sellers during the holidays.
More than a quarter of Americans expect to spend less during the holidays this year, according to a recent survey, a sign that retailers will have to try harder to win shoppers.
CHASING PHONE-WIELDING SHOPPERS
Best Buy has been facing cut-throat competition -- often on price -- from chains such as Wal-Mart Stores Inc and Internet retailers like Amazon.com Inc.
In order to win online shoppers and those who comparison-shop using their cellphones, Best Buy is "dramatically" increasing its spending on mobile and digital advertising, as well as carrying more products online, Dunn said.
"The Web is an incredibly important component of our overall strategy," said Chief Marketing Officer Barry Judge, adding that 60 percent of Best Buy customers visit the retailer's website before coming to the store.
Best Buy has now decided to offer products online from other sellers through its new third-party Marketplace, as it tries to better compete with Amazon and online auctioneer eBay Inc.
The retailer has also extended its return policy for purchases made during the holiday season, allowing shoppers to exchange gift purchases from November 13 to January 24.
Best Buy also hopes to be the destination of choice for the most sought-after gadgets this season.
Asked if the chain would carry the Amazon.com tablet expected to be launched on Wednesday, Dunn smiled and said, "We are having all the conversations you would expect us to be having."
He said he expects Apple Inc's iPhone 5 to hit stores soon. Apple is expected to launch the latest iPhone next week.
(Reporting by Dhanya Skariachan; editing by John Wallace, Phil Berlowitz)
- Malaysian jetliner may have turned back before vanishing |
- Radar showed missing plane may have turned back: Malaysia military
- Malaysian plane presumed crashed; questions over false IDs |
- CORRECTED-UPDATE 4-Malaysia Airlines plane crashes in South China Sea with 239 people aboard - report
- Malaysian jet's disappearance among rarest of aviation disasters