MIT Sloan Executive Education Blog

Should retail stores be open on holidays?

We recently watched a conversation on social media on the subject of retailers choosing to open on holidays--in this case, the upcoming Thanksgiving holiday here in the U.S. It's quite the heated topic: it has spawned a Facebook page urging consumers to boycott stores open on Thanksgiving, and there are any number of memes floating around listing the retailers who are choosing to open. And unfortunately, many of those retailers are the biggest ones here in the States.

One would think there's little controversy in urging businesses to let their employees have a day off of work to spend at home celebrating the holiday. But the "other side" can point to the fact that we have a free market society, and businesses can choose to operate (for the most part) however they want. The dark--and somewhat unspoken--side of that argument ignores the fact that many of these businesses are retailers and many retail workers are not given a choice in the matter. A common comment, of which we've seen a few variations, is that if people don't like working on Thanksgiving, they can just go get another job.

The average salesperson is not just looking for extra cash

Opinions like these reveal some biases people have against retail jobs, display a lack of understanding of the retail market, and fly in the face of some hard facts. One might think of retail jobs as the domain of teenagers and retirees who simply need some "extra cash." That idea is simply not true. As MIT Sloan School of Management Adjunct Associate Professor Zeynep Ton pointed out in the webinar, "The Good Jobs Strategy: Why Good Jobs are Good for Business," there are 4.3 million salespeople in the U.S., the average sales associate is female and 38 years old, and many of them are supporting families. These retail jobs are considered "bad jobs," due to their low wages, erratic schedules, and lack of opportunities for advancement. But while it may appear one retail job is just like the next, few people, regardless of income level or other demographic information, can just "decide to go get another job." Employees need to factor in seniority, benefits, transportation, and numerous other variables that impact their ability to change jobs.

Soft costs of being open on Thanksgiving

And yes, although the retailer will be making money by being open for business on Thanksgiving, the actual profit at a high level is sales minus operating expenses, minus paying holiday and/or overtime wages. Those overtime wages are not just for the sales associates who are paid minimum wage, but also to store managers who must also be on site. Then retailers need to weigh the "soft" costs of being open--will some valued associates, in fact, go off and find other jobs? What will the costs of replacing them be? Will store traffic be enough to warrant staffing the store? Lastly--and perhaps most important of all--what is the bigger impact on our staff?

Ton has done extensive research in the area of retail operations and has proven that retailers who offer "good jobs," and invest in their employees see greater payback in more efficient operations, higher customer satisfaction and even greater profitability. So the decision to open on a holiday needs to be a bigger one, and not just about sales on that one day. 

Zeynep Ton is an Adjunct Associate Professor of Operations Management at MIT Sloan and teaches in the Executive Education courses Strategies for Sustainable Business, Developing a Leading Edge Operations Strategy, and in the Advanced Management Program. She is the author of The Good Jobs Strategy.

Photo credit: Mr.TinDC / Foter / CC BY-NC-ND
This entry was posted in Work and Employment on Sun Nov 16, 2014 by MIT Sloan Executive Education


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