Mother’s Day, less than 2 weeks away, will give us a good look at whether America’s ongoing vaccination rollout is starting to encourage consumers to shift their spending habits back to pre-pandemic norms. This is an important secular holiday in the US, with many Americans treating their moms, wives and/or grandmas to presents or outings.
The National Retail Federation is out with their annual 2021 Mother’s Day Survey conducted earlier this month, and it is a useful advance look at consumer spending intentions. Here are our top 3 datapoints from the survey followed by our takeaways:
#1: The NRF survey points to all-time record overall and individual spending:
- The NRF expects Mother’s Day spending to reach a total of $28.1 billion this year, a new record. That’s up 5.2 pct from 2020 and 12.6 pct (!) from 2019.
- Individual consumers plan on spending an average of $220.48 on Mother’s Day items, also a survey high. That’s up 7.7 pct from last year and 12.2 pct from 2019.
Takeaway: the jump in spending intentions after last year’s Pandemic Crisis trounces the 2009/2010 Great Recession experience. For example, per person expected Mother’s Day spending only rose by 2.4 pct in 2010; it took 2 years after the Great Recession for these outlays to rise strongly, up 10.9 pct in 2011.
There are 2 major reasons for this: 1) The US government has pumped $5 trillion of fiscal stimulus into the economy in a short period of time versus just under a trillion back in 2010. 2) The unique nature of the public health crisis enabled many Americans to save in many ways including not commuting, traveling or going out to eat, even though unemployment was obviously a headwind for many households. These and other savings in addition to stimulus checks not only allowed Americans to pay down debt but also build a cash buffer. The result: Mother’s Day spending more in line with the second year as opposed to the first year after a deep recession.
#2: Four spending categories caught our eye:
- Electronics: Americans plan on gifting $3.3 billion worth of electronics for Mother’s Day this year, up 52 pct and $1.1 billion from 2019, the largest increase of any category by dollars to be spent.
- Jewelry: Jewelry gifts are expected to reach $6.1 billion, or $2 billion more than the second largest category (special outings). It was only up 2 pct in 2020, but should rise 15 pct this year. It’s expected to be up almost $1 billion since 2019 (+$0.89 bn, +17 pct).
- Housewares/Gardening tools: This category is expected to rise to $1.6 billion in 2021, up almost half a billion dollars since 2019 (+$0.49 bn, +44 pct). Much of that growth came in 2020 (+35 pct), but has carried over to this year (+7 pct).
- Special Outing: Money spent on special outings is expected to fall by 10 pct and almost half a billion dollars ($0.48 bn) to $4.1 billion since 2019. It was down 12 pct in 2020 and is forecast to rise just 2 pct this year.
Takeaway (1): Americans are planning to spend a record amount on both jewelry and electronics, both expensive items, for a second straight year. Cash savings and stimulus checks help explain both. Google searches for “jewelry” are already up 28 pct versus this week in 2019. As for electronics, we’ve chronicled the massive tech upgrade cycle since the pandemic started, which we’ve acknowledged lasted longer than we anticipated. With travel and business restrictions still in place, some consumers are still reallocating their spending from experiences to other physical goods.
Takeaway (2): Mother’s Day buying intentions show the home upgrade cycle continues as people keep sprucing up their homes. As for the slow recovery in special outings, the NRF notes that “there is still a lot of uncertainty”. We’d also add that capacity limits in many states remain, restricting the number of Americans who can eat out even if they want to.
#3: From the NRF survey analysis: “This year over one-third (34 percent) plan to purchase their Mother’s Day gifts online, down from 2020 when shoppers were dealing with mandated shutdowns, but still above pre-pandemic levels.”
Takeaway: the pandemic quickly altered consumer behaviors, and the transition to online shopping has not worn off even with stores more open.
Bottom line: the findings from this survey fit with our ongoing message that the “return to normal” trade will likely take longer than many expected. No doubt the US consumer is strong, but it will take time to unwind over a year of pandemic behaviors, such as staying closer to home.