Americans are projected to spend a record $22.9 billion to celebrate Father’s Day this year, following a slightly down year in 2022, according to research from the National Retail Federation and Prosper Insights & Analytics.
Father’s Day revenues last year came in at $20 billion, following the previous high of $20.1 billion in 2021.
About three-fourths of Americans, about the same as in recent years, plan to celebrate the holiday with an average expenditure of $196.23. That is also a new record, surpassing 2021’s $174.10. The average spend in 2019, the last year before the start of the novel coronavirus pandemic, was $138.97.
NRF says the new records are being driven primarily by an increase in consumers’ choice of gifts with a higher percentage planning to buy apparel, electronics and personal care products. More will also be spent on special outings such as brunch or dinner, product subscription boxes and events such as sports or concerts as gifts.
Greeting cards will be the most widely purchased Father’s Day gift with 61 percent planning to do so. Clothing (55 percent), a special outing (52 percent), gift cards (48 percent), a product subscription box (42 percent), personal care items (32 percent) and giving a gift to an event (29 percent) follow on the list.
The percentages of people planning to gift a product subscription box and giving a gift to an event were higher than previously recorded. NRF began tracking subscription boxes in 2019 and events as gifts in 2016.
“The big spenders this Father’s Day are consumers aged 35-44 who are expected to outspend other consumers by nearly $100,” said Phil Rist, executive vice president of strategy at Prosper. “Those aged 45-54 plan to increase their spending the most, by spending $57.04 more than they planned last year.”
Numerator’s Q2 Holiday Report found that 79 percent of those it surveyed plan to celebrate Father’s Day with food/meal (64 percent), gifts (57 percent) and alcoholic (27 percent) and non-alcoholic beverages (17 percent).
Thirty-two percent said inflation will affect their Father’s Day shopping and celebration plans.
Consumers buying gifts will try to save money by purchasing items on sale (42 percent), using coupons (23 percent) and preparing meals with “budget-friendly foods” (22 percent).
DISCUSSION QUESTIONS: Are you surprised by the bullish expectations for Father’s Day based on retailers reporting that consumers have scaled back purchases? What can retailers selling products do to compete when consumers spend more of their holiday gift dollars on experiences?
13 Comments on “Will Retailers Report Record Father’s Day Sales?”
Neil Saunders, Managing Director, GlobalData
I am a little surprised by this given the current state of consumer finances. However, the view is driven by survey intentions which do not always align with what happens in reality. That said, I am more bullish on people celebrating by eating or attending some sort of event – we have seen households prioritize experiences more strongly over the course of this year.
Jeff Sward, Founding Partner, Merchandising Metrics
There hasn’t been a lot of rosy retail news lately. In fact, there has been some downright bearish commentary. But it’s totally possible that some discretionary spending is softening in order to enable those purchases and celebrations that people really don’t want to cut back on. Hopefully Moms and Dads are on the list of discretionary spending that will survive an otherwise cautionary outlook.
Mark Self, President and CEO, Vector Textiles
Completely surprised. Father’s Day is one of these “made up” holidays and it does not give anyone any time off (even worse!!). It warrants a phone call, maybe a card, depending on the situation. But instead you have almost $200 being spent on every Dad. Who knew? Not me, obviously.
Dave Bruno, Director, Retail Market Insights, Aptos
After the past couple of years, I’m officially retiring from trying to predict consumer spending behaviors! I will only say that purchasing intent surveys rarely match actual behaviors, so I will just wait for actual results next week. Oh, and I might add that I don’t believe that too many of the wildly-hyped $3500 Apple VR headsets will be part of the Father’s Day gift-giving spend, no matter how much growth we see!
Gene Detroyer, Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
My first reaction was surprise. Then I thought about my planned Father’s Day. I will join my son and grandsons for a baseball game. The cost of that will surely exceed what they spent last year, as we just went out for brunch.
Melissa Minkow, Director, Retail Strategy, CI&T
I am honestly surprised by this considering the economy, but perhaps this has to do with Millennials, the life-stage they’re at, and the fact that they like to celebrate as many holidays as possible.
Natalie Walkley, Sr. Director, Marketing @ Optoro
Given the economic situation, bullish expectations are surprising. Yet, if I did the math on what I spent this year, I exceeded previous years.
Lucille DeHart, Principal, MKT Marketing Services/Columbus Consulting
I am surprised. Father’s Day has traditionally been a lighter gifting event. I would equate the increased budget allocation to inflation growth, particularly for food items. It is nice to see a stronger appreciation for our dads.
Brian Cluster, Director of Industry Strategy – CPG & Retail, Stibo Systems
Not surprised at all. If you look back at Mother’s Day projections for this year, it was forecasted to be an 11.8% increase from PY while Father’s Day is expected to be a 12.6% increase over the prior year. Inflation plays a part in this increase as well as changing behavior. I suspect that there will be another small shift in the mix toward meals/experiences versus the typical Father’s Day gifts of ties, shirts, etc. Consumers have re-evaluated what’s important and commemorating the key holidays with loved ones with experiences such as a nice lunch out with Dad seems to be more common now vs. pre-pandemic.
Craig Sundstrom, CFO, Weisner Steel
Retail forecasts come from a small subset of retailers, who seem to come from two classes: bullish and gloomy. Surprised?? Not in the least.
Brittany Bullard Berg, SVP, Global Pre-Sales & Product- Impact Analytics
I am also surprised given the current challenges with inflation. However, there are many individuals who are having to work additional years longer than traditional retirement age, due to the current stock market. I see this demographic wanting to do something small but special for their parents this year.
Ricardo Belmar, Retail Transformation Thought Leader, Advisor, & Strategist
I find the forecast a bit surprising, but weren’t Mother’s Day forecasts early bullish? Perhaps consumers aren’t paying attention to how much they are spending on these holidays that are meant to encourage families to spend time together even if just to deliver a gift. I expect the increases will come from experiences and services (like dining) much more so than merchandise if we realize these gains.
Roland Gossage, CEO, GroupBy
During the past 6-12 months consumers have shown that, despite high inflation, gift purchases are still top-of-mind, so these projected sales numbers aren’t too surprising. Though many may spend holiday budgets on experiences, the marketplace for product purchases is still there. Research has shown that customers who purchase experiences over gifts tend to value time with loved ones over material goods, speaking to a different customer profile with different buying motivations. These customers are less likely to purchase physical gifts regardless. For customers who prefer giving gifts, providing an outstanding customer experience complete with next-generation product discovery and seasonal landing pages with great gifts for dad is enough to secure the sale.
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