Despite concerns about supply chain disruptions, inflation at a 40-year high and the Omicron variant, the American consumer delivered retailers a record setting Christmas holiday shopping season spending $886.7 billion. This is an increase of 14.1% over last year’s total, which, itself, was a surprising 8.2% increase from 2019. Americans appear to have been in a mood to spend throughout the pandemic and show no signs of slowing down.
While the holiday season is certainly the biggest source of revenue for U.S. retailers, many other days and events throughout the year create significant opportunities for retailers. Two of these occasions have converged this year due to the extension of the NFL season to 17 games. For the first time, the Super Bowl and Valentine’s Day fall on consecutive days. Both celebrations, historically, have provided a boost to retailers, but will their proximity to each other negatively impact retail sales?
Not according to recent surveys conducted by the National Retail Federation and Prosper Insights and Analytics. The results of these annual surveys indicate that consumers plan to spend big this year. On Sunday, February 13, Super Bowl LVI will be played with the Cincinnati Bengals hosting the Los Angeles Rams at SoFi Stadium in Los Angeles for Super Bowl LVI. Yes, you read that right, the Bengals are the home team in the Rams own stadium due to NFL’s practice of alternating home teams by conference each year.
As host city, Los Angeles expects an estimated economic impact of $478 million to the region, while Inglewood, the location of SoFi Stadium, is forecasting a $38 million boost to the local economy. The region expects 125,000 out-of-town visitors with an average stay of four days spending approximately $250 per day in addition to travel and hotel costs. However, some economists question these numbers stating that they are inflated due to a number of mitigating factors. Bottom line, a lot of money is going to flow into local coffers during the week leading up to the game.
Over the past few decades, Super Bowl Sunday has become an unofficial holiday and ranks second only to Thanksgiving in the amount of money spent on food. This year, 184.5 million people plan to watch the game with 90 million of those hosting or attending a party. An additional 13.7 million people will head out to a local restaurant or bar. It is estimated that $14.6 billion will be spent on Super Bowl related items, supplies and activities, of which 79% of total spending will be dedicated to food and beverage. That amount is up from last year’s $13.9 billion yet remains far below the all-time high of $17.2 billion in 2020 when the Kansas City Chiefs overcame a 10-point deficit, scoring 21 points in the fourth quarter to beat the San Francisco 49ers.
Like Thanksgiving, this “holiday” puts food front and center. Super Bowl party hosts will serve up 1.42 billion chicken wings, 10 million pounds of ribs, 11.2 million pounds of potato chips and 8 million pounds of guacamole. To quench the thirst of their guests, consumers will spend $1.2 billion on beer, $517 million for soft drinks and $226 million on whiskey, which may explain why 17 million people are expected to call off work the Monday following the game.
But get over that hangover quickly. February 14, Valentine’s Day, will be upon us within a few hours after the final whistle blows. After the evening of partying with family and friends, it’s now time to spend some quality time with that one special person. It appears that Americans are up to the challenge. According to survey results, 53% plan to celebrate Valentine’s Day and 76% of those believe it’s very important to do so after the stress and disruption created during the past two years by COVID-19.
Consumers are expected to spend an average of $175.41 per person this year, totaling $23.9 billion. Candy (56%), greeting cards (40%) and flowers (37%) remain the most popular gift items. Gifts of experience, such as dining out or tickets to concerts and sporting events, have been growing in popularity. Spending on experiences is making a big comeback this year with spending on this category expected to total $4.3 billion, equal to the amount spent in 2020. Last year, experience related spending fell by half with pandemic restrictions in place. Also, on many shopper’s lists this year are gifts of jewelry, with sales forecasts reaching an all-time high of $6.2 billion.
Valentine’s Day shopping is increasingly conducted online with 41% of gifts purchased this way. Super Bowl shoppers, on the other hand, are more likely to visit grocery-anchored and other shopping centers to stock up for their event, although food delivery services are gaining traction. Visits to brick-and-mortar retailers increase foot traffic at shopping centers that in turn benefit neighboring stores. One may conjecture that the Super Bowl has a greater downstream effect on local retail markets. In any case, the upcoming $38.5 billion-spending spree for these two winter holidays should have a very positive impact on the U.S. retail market as it continues its road to recovery.