* High street giants expect to maintain or improve YoY Christmas sales
* Majority do not plan to hire more temporary staff
* Pay for Christmas workers to lag behind inflation
* Staff engagement top priority to ensure consistent service

The UK’s major high street retailers are optimistic about the festive season, with the significant majority forecasting equal or improved sales on 2010, according to new research from global management consultancy Hay Group.

However, despite these bullish expectations, over half do not plan to expand their temporary workforce to cope with increased demand, raising questions over the impact on customer service.

HR professionals at Asda, Debenhams, Hamleys, Next, New Look and The Carphone Warehouse were among 24 household name retailers to take part in Hay Group’s study.

A Christmas Gift For The Economy…

Despite declining consumer spending and confidence, almost four fifths (79 per cent) of retailers expect the same or better seasonal sales compared to last year.

Almost half (46 per cent) are predicting a sales uplift, with a fifth (21 per cent) forecasting an improvement of more than five per cent.

None expect a fall in Christmas sales performance this year.

…But Not For Employment

However, the outlook is less positive for Christmas hiring, putting pressure on retailers to ensure the quality of their customer service.

Despite forecasting a rise in demand, almost half (46 per cent) of retailers will take on the same number of temporary staff as in 2010, while over one in ten (13 per cent) plan to recruit fewer staff.

Less than a fifth (17 per cent) will hire more temporary workers than last year.

Temp Pay To Fall In Real Terms

Temporary staff are likely to be paid less than last year in real terms, Hay Group found.

On average, seasonal staff will be paid just three per cent more than in 2010 – in line with the minimum wage increase but well behind inflation.

Three quarters of retailers (75 per cent) will pay Christmas staff around the same amount as their permanent colleagues. None expect to pay more.

In addition, almost a fifth (17 per cent) of retailers will not provide temporary workers with discretionary incentives or benefits. Just over half (58 per cent) will offer discounts.

Adam Burden, reward information consultant at Hay Group, comments: “These buoyant Christmas sales predictions are positive news for the economy, but coping with the anticipated demand could present a real challenge for retailers.

“HR departments at many household name retailers are hiring cautiously this festive season. And with real pay in decline, maintaining staff morale and high service standards through the peak shopping season will be tough.

“In a fiercely competitive environment, retailers must ensure that all staff are fully engaged and able to provide excellent service.”

In response to Hay Group’s findings, Jo Causon, chief executive of the Institute of Customer Service, comments: “Customer service is a critical differentiator on the high street and a key driver of bottom line performance ­­– never more so than during the crucial Christmas period.

“Those retailers that ensure their staff are able to deliver excellent service during the busiest and most competitive time of the year will win the battle for Christmas sales.”