Although Memorial Day is for memorializing soldiers who lost their lives in war, the three-day weekend holiday for many consumers signals the kick-off of summer barbecues, beach-going and relaxing.
For retailers in many sectors of the market, the weekend also means a sharp spike in store traffic. According to RetailNext, retail sales traffic jumps about 73 percent during the Monday of Memorial Day as compared to average traffic for a nonholiday Monday. And by channel, department stores see a 114 percent jump in traffic on that day while specialty stores see a 41 percent gain.
Traffic may be higher than normal, but sales and average ticket prices are not expected to be proportionally as high. The weekend gives retailers a chance to clear out bloated inventories of spring apparel and accessories. As a result, markdown activity may be higher than normal.
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In an alert to its consumer members this past week, Dealnews.com said “of all the items you’ll see on sale throughout May, spring apparel will dominate, representing 64 percent of all Memorial Day deals.” The membership Web site and mobile app told its members to expect markdowns of 40 to 90 percent off at Macy’s, H&M, Old Navy and Eddie Bauer.
In regard to travel and fuel prices, the AAA estimates 33 million travelers will hit the road over the weekend, which is a 5.3 percent increase over last year and represents the highest volume of travelers in a decade. “Gas prices may not change all that much by the holiday weekend, which would result in the cheapest Memorial Day gas prices in at least five years,” the AAA said.
“Despite the national average continuing to register new highs for 2015, drivers are still experiencing significant yearly savings at the pump and today’s price is discounted by 94 cents year-over-year, making it the lowest average for this date since 2009,” the AAA added.
The so-called “fuel dividend” has not yet trickled into the apparel sector — or general retail. Retail sales were stagnant in April save for big-ticket items. But analysts and economists expect better retail sales in the second half. Meanwhile, for the current quarter, retailers in at least one region are feeling optimistic.
The Michigan Retail Index, which is published by the Michigan Retailers Association and the Federal Reserve Bank of Chicago, forecasts stronger sales for the May-through-July period. In a statement, MRA president and chief executive officer James Hallan said 67 percent of respondents in the survey expect to see sales increase over last year. “An improving economy marked by a falling unemployment rate has been boosting retailers’ sales and forecasts,” Hallan said.