Spring Holiday 2022: Splurge or Skimp

The Easter holiday triggers exceptional spending on confections, food, gifts and travel.  It provides grocery stores, clothing retailers and gift shops with a welcome boost in sales tickets as they await summer and vacation activities. 

The National Confectioners Association (NCA) projects Americans will fill their Easter baskets with at least $4.2 billion in chocolate bunnies, marshmallow chickens, jelly beans and candy-coated eggs.  Of course, the number has to be taken in context.  The sugar trackers and the NCA are pinning the estimate on spending in 2021, which was anything but normal.  Last year, in 2021, consumers were just emerging from their homes.  Although flush with stimulus checks and fortified with coronavirus vaccines, consumers were still hesitant to go far from home.  Some extra candy spending was a safer choice for holiday cheer as opposed to risky meals at restaurants or travel to grandparents or cousins.

This year may again be an outlier.  Inflation is looming, the likes of which most younger Americans have never experienced.  Historically, most consumers purchase their holiday food and gifts without considering price.  This year may trigger more careful choices to pick up specials or bonus buys.  The Information Resources Institute (IRI) found in a survey conducted in March 2022, that consumers plan to spend as much as 10% more on food compared to last year.  Unfortunately, this might be more the consequence of inflated prices for milk, eggs, chickens and hams, which are common fare for Easter holiday meals, that it is a result of higher volumes.

Nonetheless, a return to traveling and hosting family and friends is likely to arise in the 2022 season.  The IRI survey also found that 29% of respondents were planning to attend or host a holiday meal.  This compares to 25% last year.  Americans are also letting more people through the door as average guest lists inch up to seven people from six in 2021.  This could represent a little extra for travel agencies, airlines and taxis as guests respond to invitations.

In 2022, Easter coincides with the beginning of the Jewish Passover celebration, putting another twist in the analysis of spending in 2022 spring religious holiday season.  The Passover holiday in particular is focused on food and travel.  The seder custom takes families on a round of home visits and shared meals that are based on traditional food and drink.  The combined holidays could center more spending in the week leading up to Easter and Passover.  Ramadan got a head start on April 1st, carrying with that another rich history of food-related traditions.

The National Retail Federation NRF is pulling the bunny’s ears with an estimate of $29.8 billion in spending by Americans in 2022.  This is a whopping 3.7% lower than 2021.  The survey covers travel, clothes, events, such as treasure hunts, and the holiday meals.  The NRF suggests spending is likely to be lower by at least $10 per person as families cut back or bargain shop as strategies to overcome increases in food, travel and clothing.          

For economists stressing about the sluggish state of things, it might be a good time to find some bargain jelly beans with a “buy one get one 25% off” coupon.

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.