Memorial Day 2015...Title Microsoft Word - FBIC Global Retail Tech Report on Memorial Day...

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May 21, 2015

Fung Business Intelligence Centre (FBIC) publication: microShops Copyright © 2015 The Fung Group, All rights reserved.

D E B O R A H W E I N S W I G E x e c u t i v e D i r e c t o r – H e a d o f G l o b a l R e t a i l & T e c h n o l o g y F u n g B u s i n e s s I n t e l l i g e n c e C e n t r e d e b o r a h w e i n s w i g @ f u n g 1 9 3 7 . c o m N e w Y o r k : 6 4 6 . 8 3 9 . 7 0 1 7

May 21, 2015

• Retailers hopeful for Memorial Day to jumpstart summer sales

• Lower gas prices means more money in consumers pockets

• 37.2 million Americans traveling over the holiday

• Warmer weather in the East, rain possible in much of the country

Memorial Day 2015: Will a strong promotional atmosphere finally have consumers shopping their way into summer?

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MEMORIAL DAY 2015 It’s time for backyard barbeques, white summer outfits and Memorial Day sales to kick-‐start your summer!

For those in the US, Memorial Day is the federal holiday when we remember and honor those who died while serving in the country’s armed forces. It is also the unofficial beginning of summer, and the summer vacation season. The holiday itself usually begins on the Friday before Memorial Day Monday, and is honored with celebrations throughout the weekend.

What are people buying?

• Grills

• Bikes

• Deck furniture

• Swim accessories

• Mattresses

• Home goods

• Cars!

Memorial Day is one of the biggest promotional days of the year for US retailers. For the last couple years, Memorial Day sales have started around May 12 and lasted through the month, and even into June. Traditionally, Memorial Day savings focus on mattresses, home goods, tech and entertainment items, and apparel. Summer items, such as camping goods, grills, golf and swim accessories, bikes, and deck furniture, are the most strongly promoted.

While Americans have had a few more dollars in their pockets thanks to the ongoing fall in crude oil prices, they seem to be holding on to those dollars. With retail sales up 1.1% in March, but remaining near flat in April, will this year’s Memorial Day promotions be enough to spark the beginning of summer retail sales?

Month-‐over-‐Month Change in Retail Sales

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STORE TRAFFIC

US store traffic fell 2.6% from a year ago for the week ending May 16, but with summer right around the corner, retailers are hoping to drive traffic back up. ShopperTrak data showed that customer traffic was down 1.5% for apparel stores and down the same amount for electronics stores. However, traffic is expected to increase as the end of May is when consumers start shopping for college graduation gits, Memorial Day weekend and summer travel.

PROMOTIONS

This year, apparel promotions are strong, and Macy’s is running bonus sales on a range of items, including “summer essential” clothing, outdoor furniture and seasonal wares. Kmart has been promoting items for holiday parties and outdoor barbeques, while Sears and JCPenney are offering deals on apparel, furniture and bedding. Bloomingdale’s had a 16-‐hour, online, invitation-‐only sale on home goods.

Discounts have ranged from 40%–90% off for some retailers and brands, including Macy’s, H&M and Old Navy, and 30%–75% off designers such as Ralph Lauren and Calvin Klein. The biggest discounts come when shoppers combine coupons and featured “stackable” discounts, such as promo codes, that offer a second price cut.

Last year, Memorial Day Weekend sales increased by 3.9% over 2013, with shoppers spending $1.9 billion more than in the previous year. Sales over the weekend totaled $50.7 billion in 2014, according to Applied Predictive Technologies.

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May 21, 2015


2015 MEMORIAL DAY PROMO TRACKER

WEATHER

This year, the East will experience warmer weather than last year over the holiday weekend, which is significant, since 2014 trended above normal, with extreme warmth in the West, according to weather analytics company Planalytics. This will cause an increased demand for some of those heavily promoted seasonal and outdoor items, such as suncare, camping gear and picnic foods. Rain is expected, however, in much of the rest of the country, including in the West, Plains and Upper Midwest. There could be increased severe weather threats, especially in the Plains, as we are still in the midst of volatile-‐weather season.

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May 21, 2015


TRAVEL

Memorial Day Weekend is one of the busiest travel weekends of the year, and this year AAA is predicting the highest travel numbers in a decade. The organization expects some 37.2 million Americans to travel to some holiday destination, 89% of them by car.

Some of the states benefiting from tourists this weekend include Georgia, which will see an estimated 1 million visitors, an increase of close to 5% over last year. Virginia is also expecting a record number of travelers, approximately 1 million, which would be an increase of over 4% from last year and its highest number since 2005. New Hampshire state tourism officials estimate that the state will welcome about 575,000 visitors, an increase of 3% over last year.

In Texas, where more people travel by car than use public transportation, retail gasoline prices have risen statewide by 4 cents this week, according to the AP Regional State Report. An estimated 3.1 million Texans will travel 50 miles or more from home over the holiday weekend.

But while gas prices may be up in Texas, gas prices overall are the lowest they have been for the holiday in six years, and 1.1 million North Carolinians will take to the roads over the weekend.

CONCLUSION

Retailers and brands have high hopes that highly promotional Memorial’s Day activity combined with warmer weather throughout some of the country, will kick-‐start summer retail activity in the US. With extra money from reduced oil costs just waiting to be spent, and an anticipated record number of travelers, some of those dollars are certain to go toward restaurants, travel and seasonal item purchases.

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May 21, 2015


Deborah Weinswig, CPA Executive Director—Head of Global Retail & Technology Fung Business Intelligence Centre [email protected] Cam Bolden [email protected] Marie Driscoll, CFA [email protected] John Harmon, CFA [email protected] Amy Hedrick [email protected] Aragorn Ho [email protected] John Mercer [email protected] Charlie Poon [email protected] Kiril Popov [email protected] Stephanie Reilly [email protected] Lan Rosengard [email protected] Jing Wang [email protected]

Memorial Day 2015...Title Microsoft Word - FBIC Global Retail Tech Report on Memorial Day...

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