Enter March, known for more than just the first day of spring. The NCAA’s March Madness, St. Patrick’s Day, Daylight Savings Time, and, of course, Spring Break all take place in March and all have an impact on retail sales.
But before we dive into March, let’s see how February fared and what that means for retail sales going forward.
Freezing temperatures and snowstorms that swept over parts of the U.S., most likely chilled retail sales in February, as the bad weather kept Americans home. According to figures released by the Commerce Department last week in Washington, purchases unexpectedly dropped 0.6 percent, a third consecutive decline since January.
Auto purchases dropped by the most in more than a year and Americans spent less at restaurants and home improvement stores, which opens the possibility for a rebound in demand this month. Most economists remain optimistic on the outlook for consumer spending, the biggest part of the economy.
IN LIKE A LION
FIRST DAY OF SPRING & EARLY EASTER
March can signal to many consumers that it’s time to start buying spring and summer clothes. Aren’t people living in cold climates tired of wearing sweaters, heavy coats and boots? We know apparel sales will start to see a lift as the first day of spring approaches and temperatures begin to rise.
With Easter two weeks earlier this year – Sunday, April 5 vs. April 20 in 2014– moms are getting a jump-start on shopping for their little ones’ Easter outfits, which we believe will positively impact March sales for retailers, not to mention party supplies and such. In many cases purchases that would have waited until April are taking place in March.
According to research from Thomson Reuters, traditionally the weeks leading into Easter experience a rise in retail sales. Looking at retail earnings in the first quarter, which runs from February through April, a 5 percent growth is expected over Q1 2014.
ST. PATRICK’S DAY
St. Patrick’s Day, which is today (March 17), traditionally benefits restaurants, bars, party stores, supermarkets, and traditional retailers. (Did we mention bars?) A reported 127 million Americans – or more than half of all U.S. residents – plan to celebrate St. Patrick’s Day this year. As a group more than 26 times the Republic of Ireland’s total population plans to wear – and spend – some serious green. Americans will shell out a combined $4.6 billion for this year’s holiday – and spend an average of $36.52 per person, up from last year’s $35.78, according to a National Retail Federation report.
Further, a reported 13 million pints of Guinness beer will be consumed on St. Patrick’s Day, according to WalletHub. To put that into perspective, you could fill two Olympic-size swimming pools with that amount of beer and still have enough left over to fill approximately 650 4-by-5-foot hot tubs, plus still have more left to drink. St. Patrick’s Day is the fourth-most popular drinking holiday in the U.S., trailing New Year’s Eve, Christmas and July 4th.
For some parts of the country, Spring Break began the first week in March; for others it continues throughout the month – and even into April.
During Spring Break, many families throughout the country with young kids go on vacations – cruises, beaches, the Caribbean or skiing. It’s also a time when college students head to the closest beach destinations in Florida, Georgia, Alabama, South Carolina or even California.
Spring Break is in full gear and benefiting everything from airlines and hotels; to restaurants and rental cars; to gas stations and malls and many other retailers. In South Florida, spring break is alive and well with heavier traffic, crowded restaurants and sold-out hotels.
The industry’s leading trade group, Airlines for America, said that between the spring months of March and April they are expecting to carry 134.8 million passengers (2.2 million per day). This will mark the highest level since their 2007 peak, and it will lead to a net total profit of $7.3 billion for the country’s 10 publicly traded airlines. Airlines, hotels and tour operators are all anticipating a record year. The improving economy and better job markets have led to more savings and more spending power.
THE EBB AND FLOW OF RETAIL
Taking the literal meaning of Daylight Savings Time, “Spring Forward,” we believe that March is a chance for retailers in all categories to play catch up after the sluggish start to the first quarter and move forward. With warmer weather we hope retail sales will heat up in kind. That’s our version of March Madness.