FedEx Corp. (NYSE: FDX) expects to handle more than 260 million packages during the coming holiday season. That’s a 12% increase from a year ago, and to cope with the flood the company plans to hire 20,000 temporary workers. That’s more than we noted from either Best Buy Co. Inc. (NYSE: BBY) or J.C. Penney Co. (NYSE: JCP) in our recent look at the retailers expected to do the most seasonal hiring this year.That’s good news for employment, but not altogether a boost for FedEx. The company noted that most of the volume increase this year is coming from its low-profit SmartPost residential service where the US Post Office completes the package delivery. The SmartPost service includes mostly light-weight, unspecified delivery date packages from on-line sales that do not generate a lot of revenue for FedEx.
The company still expects retail sales to rise 2.5%-3% this holiday season. However, if FedEx is right about where its revenues are coming from, local retailers could be be in for a tough holiday shopping season. Large retail chains, though, could get a somewhat bigger boost from an increase in on-line sales.
Paul Ausick
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