Summer didn’t officially start until June 19, but for consumers the informal start is the Memorial Day weekend. That came a little earlier than usual on Monday, May 27. The softer performance of retail sales in the first two months of the second quarter is unlikely to improve much in June unless there is better-than-expected spending. This could come from gift buying and eating out for Fathers Day on June 15, and/or on high school and college graduations in early June, and/or on promotional sales intended to pre-empt the power of Amazon’s Prime Day in July. In July, the Prime Day event will be more than just Amazon as other etailers compete for online shoppers’ attention and dollars.
Spending on vacations could wait for the Independence Day observance on Thursday, July 4. Some companies did not grant a federal holiday for Juneteenth in order to give their employees a four-day weekend on July 5. Those with vacation benefits who can arrange it will take three or four days off to have a full week’s break over the June 29-July 7 period. If this happens, much of the spending associated with Independence Day celebrations at home won’t happen until the first days of July, or for travel costs like restaurants, lodging, and/or fuel.
The time for state sales tax holidays is approaching. The majority of these events are associated with back-to-school shopping and concentrated around the first weekend in August. The annual sales tax holidays are disliked by governments as a loss of potential revenue, but retailers and consumers look forward to a chance to save a few dollars, especially for some higher priced items like computers. It isn’t only parents and students who can save by bargain hunting and not paying the sales tax. Although the sales tax typically cover clothing, many households prefer to put off purchasing seasonal wear until the weather is cooler. In any case, a boost to retail sales from back-to-school promotions probably will be more in August than July or September.
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