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Memorial Day weekend expected to bring life to a lagging retail sector

By Kristopher Fraser

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Retail

With many retail stores posting not so hot Q1's, Memorial Day weekend gives them a brevity of hope for Q2. The annual American holiday, which celebrates our soldiers who lost their lives at war, is seen as one of the greatest weekends on the retail calendar. This weekend usually means plenty of store traffic, coupled with markdowns and promotional sales that motivate people to buy.

Of course, many people use this weekend to be tourists in cities all across America from the Hamptons, to Miami, to Los Angeles. Essentially, if you are a retail store in a top tourist destination next to a beach. For cities like New York where everyone flocks to the Hamptons for the weekend, retail traffic does tend to be a bit slower, but, those who are shopping in New York City use the holiday weekend to spend just as much as those on vacation.

According to RetailNext, retail traffic during Memorial Day weekend jumps a mind-blowing 73 percent. Average Mondays in retail stores are usually fairly light on retail traffic, with people obviously using their weekends for shopping, so, Memorial Day Monday is a very special Monday for the retail sector. The high traffic is driven by two main factors: the lower sticker prices for apparel, and vacations and holidays usually motivating people to spend more.

Retail traffic expected to soar thanks to Memorial Day weekend

Department stores will traditionally see a 114 percent increase in traffic, while specialty stores will see a 41 percent increase in traffic. Department stores like Macy's run sales and promotions such as 10 dollars off purchases of 25 dollars or more, 20 percent off select items, and an additional 25 percent off clearance items. One of the other reasons that Memorial Day weekend is so important to the retail sector is because it's a chance for stores to try and purge some of their overstocked inventory.

Analysts and economists are expecting retail sales to be much improved in Q2 after retail's "winter of discontent." The Michigan Retail Index, a document published by the Michigan Retailers Association and the Federal Reserve Bank of Chicago, forecasts stronger sales for May through July. James Hallan, MRA CEO and President, said in a statement 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 explained.

photo:Euro Monitor
Memorial Day