Walmart (WMT) and Target (TGT) were among the first major retailers to report earnings for a first quarter that included April, the first full month of an economy turned upside down by COVID-19. Among other measures, the retailers have been hiring thousands of new workers - though many may be temporary.
Walmart announced 235,000 new hires last quarter. It also unveiled special cash bonuses to all hourly U.S. employees that totaled $755 million, and increased pay for employees in U.S. fulfillment centers by $2 per hour temporarily. It also gave employees a new option to get paid weekly.
Walmart has also committed $35 million so far in charitable support in the United States and around the world, providing food, medical supplies, hygienic products and other items to communities in need.
Target, meanwhile, also boosted employees’ wages by $2 per hour through July 4. The company also said it was offering free back-up daycare for employees, as well as 30 days of paid leave for employees who are 65 or older, pregnant or have an underlying health condition that puts them at increased risk. Overall, Target said it invested $300 million in wage increases, bonuses, paid leave and other benefits for customer-facing employees.
Another essential retailer, CVS Health Corp. (CVS), said in late March it would hire 50,000 part-time, full-time and temporary workers to meet increased demand.
Safety is top of mind
Retailers that remained open during the pandemic say they’re dealing with significantly higher costs related to COVID-19, spending hundreds of thousands of dollars to sanitize shopping carts, checkout lanes and other high-touch surfaces. Stores also haven’t seen profits increase as much as sales because fewer customers are buying higher-margin items such as clothing.
Some retailers are taking other steps to try to improve store safety. Home Depot Inc. (HD) said it is eliminating major promotions to avoid driving large numbers of customers to stores.
Home Depot expanded paid time off, adding 80 hours for all full-time workers and 40 hours for part-time employees for 2020 or paid out at year end. It also added 240 hours of paid time off for full-time employees 65 or older or otherwise determined to be at higher risk. For part-time workers, 120 hours of paid time off was added.
The company is also giving hourly workers bonuses of $100 per week for full-time employees and $50 per week for part-time employees. It’s also paying double pay for overtime, instead of just time and a half.
Lowes gets charitable
Competitor Lowe’s Cos. (LOW) meanwhile, hired 100,000 front-line workers for the spring season, gave employees $2-per-hour raises for April and gave two bonuses of $300 each for full-time hourly workers ($150 for part-time workers) to help with unexpected expenses. It’s also offering $87 million in profit-sharing bonuses for front-line workers.
On the charitable front, Lowe’s committed $50 million to philanthropic causes, including $10 million for protective products for medical workers. It also donated all of its respirator masks to the nation’s two largest healthcare distribution groups.
At all retailers, it remains to be seen how many of the recently hired workers keep their positions once more retailers open and competition returns closer to normal. But workers hired for sanitization and security likely will remain on board for months at a minimum, with no end in sight to the risks posed by COVID-19.