Independence Day is a busy time for business owners and marketers. There is usually a three-day weekend associated with the 4th of July which increases the time for people to have for parties or for businesses to host sales. This year, the Independence Day lands right in the middle of the week, and according to a recent survey by the National Retail Federation, having a "hump day" 4th of July will lead to lower spending from consumers.
Based on a survey of more than 7,000 consumers conducted earlier June, the NRF estimates that Americans will spend $6.9 billion on food for 4th of July cookouts and picnics, which is down from last year's record $7.1 billion. Fewer people said they will be doing something special for the 4th of July holiday because it's on a Wednesday. But there is some good news. Though this year's expected spending is down from last year, it is still the second-highest amount in the history of the survey and the per-person spending is up as well.
"With the holiday falling in the middle of the week, a few less Americans will be free to celebrate and that affects spending totals," NRF President and CEO Matthew Shay said. "But those who are celebrating by attending or hosting a cookout or picnic, are actually spending more, and retailers will be ready with red-white-and-blue decorations, apparel and food."
According to the NRF data, over 216 million Americans (87 percent) plan to to something special to observe Independence Day, which is slightly lower than last year's 219 million (88 percent). The report has positive news from grocers, as nearly 153 million (62 percent) are planning a cookout or picnic. Better still, the average spending per person will be $75.35 per person, which is a new record for the survey, topping last year's $73.42. (The numbers cover only food items and not other holiday-related items.)
Besides hosting a cookout or picnic, other Independence Day celebration plans noted by survey respondents include partaking in fireworks or a community celebration (106 million) and attending a parade (30 million). The NRF also estimated that 31 million people will travel out of town for the holiday, which is down from last year's 33 million. The fact that the holiday is on a Wednesday is probably the most important factor for less 4th of July travel, but it's worth noting that one in four (25 percent) people in the survey said higher gas prices would affect their plans.
As for patriotic merchandise, the survey found that 62 percent of consumers already own an American flag, 51 percent have patriotic apparel such as a T-shirt or hat, and 38 percent own decorations. Even so, there will be a lot of people out to buy more patriotic items, with more than a quarter (27 percent) of those surveyed saying they plan to purchase additional patriotic merchandise. That number jumps to nearly half (44 percent) for those ages 18-24, but declines steadily for older individuals.
There are a few takeaways for business owners from this report. First, don't be too surprised if 4th of July sales figures are little lower this year compared to last year. Wednesday is the worst day for a holiday as people are going to be slightly less likely to go out and party if they have to go to work the next morning. But business owners and marketers shouldn't be too discouraged. Even if the pie is a little smaller this year, it's worth making an effort to be the choice people make while they're spending $6.9 billion dollars.
A second takeaway is that businesses may want to adapt their traditional 4th of July campaign to make the most of the situation. For example, there's a good chance that some people will have parties and celebrations on the weekend after the 4th instead of the weekend before. This means extending traditional Independence Day sales until the 8th or 9th could be beneficial.
Though this year's 4th of July spending may be a little smaller than last year, there's plenty for business owners and marketers to be excited about for the holiday. The lower-than-record spending is still pretty high, and people plan to spend more per person. This can be great in subsequent years when that higher rate of spending gets combined with a more traditional number of 4th of July shoppers.