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Father’s Day Spending Seen Rising

Saks Fifth Avenue is showcasing father-and-son swimwear in its Father’s Day catalogue this year.

Saks Fifth Avenue is showcasing father-and-son swimwear in its Father's Day catalogue this year.

Saks Fifth Avenue is showcasing father-and-son swimwear in its Father's Day catalogue this year.

Courtesy Photo

Thanks to improving consumer spending trends, retailers can expect a modest bump in sales for Father’s Day.

This story first appeared in the June 6, 2013 issue of WWD.  Subscribe Today.

Projections call for flat to slightly higher sales this year, with consumers shelling out more than $13 billion for their fathers on June 16.

The National Retail Federation said that although 77 percent of Americans are expected to celebrate Father’s Day this year, 70.8 percent said they will spend the same as last year. In 2012, the NRF projected that shoppers would each spend $117.14 on gifts for Dad, or $12.7 billion. This year’s number is expected to inch up to $13.3 billion.

In an annual survey on expected spending for Father’s Day conducted by the organization, 43.3 percent of respondents said they were planning to buy apparel. NRF is projecting apparel sales for the holiday to hit $1.8 billion. Special outings, however, are seen as garnering more attention from consumers, 45.9 percent of whom said they will take Dad out for dinner, lunch or another event. That category is expected to account for $2.5 billion in spending. Gift cards continue to be popular, with 39.8 percent of consumers expected to purchase them for their fathers, accounting for $1.8 billion in spending. Consumer electronics are also expected to be popular, with 21.4 percent of consumers seen spending $1.8 billion on that category of business.

Department stores remain the retailer of choice for survey respondents, with 40.6 percent saying they expect to shop there for their fathers. Discount stores are expected to account for 31.5 percent of spending, and specialty stores 27.3 percent. Online retailers continue to gain momentum, with 29.8 percent of consumers saying they will shop electronically this year. That’s up from 28.4 percent last year and 17.9 percent in 2009.

IBISWorld, a market research firm based in Los Angeles, is projecting U.S. consumers will spend $13.2 billion on the holiday this year, up 2.1 percent from last year. That figure comes on top of a 3.4 percent gain in 2012.

Caitlin Newsom, industry analyst for IBIS, said, “Overall consumer sentiment is the highest it’s been in five years, and disposable income is expected to be at its highest since 2009.” That, coupled with the lowest unemployment rate since 2009, means “a lot of people will be buying gifts for Dad.”

Apparel sales, however, are seen dropping marginally this year, according to IBIS. The firm is expecting a 0.3 percent dip to $1.74 billion from $1.73 billion last year. In 2012, apparel sales grew 3.3 percent. “People are moving away from more practical gifts to higher-budget items like electronics,” Newsom said.

This year, categories with the largest expected increase are electronics, with a 3.1 percent hike, and special outings, which are expected to jump 3.5 percent. Home improvement spending is also seen rising 2.7 percent.

“Special outings, like dining out and watching sporting events, are expected to account for the largest share of Father’s Day spending this year, contributing 18.8 percent of total holiday sales, up 3.5 percent from 2012,” IBIS said. “Specifically, spending at restaurants is expected to increase in revenue on Father’s Day as families go out to eat to celebrate Dad.”

Gift cards are also seen continuing to be popular, accounting for 13.1 percent of Father’s Day spending again this year, the same as in 2012, according to IBIS.