Savanna Kiefer
B2 Economics
5/16/17
Memorial Day Impact on the Economy
As the end of the school year begins to rapidly approach, many students are looking forward to their last day off of school before they start cramming for finals, or preparing for graduation. Memorial day kicks off the summer season and is a day that most spend barbequing, or on the lake. Typically families will be packing and heading up north for the first time of the summer. However, for people who chose to stay in town they can enjoy their weekend shopping some of the biggest sales of the year. Either way this long weekend provides a small boost to the economy before kicking off the booming business of the summer.
Both large business and small business economies will be impacted from just this long weekend. Many companies will be advertising large sales, hoping to generate a surplus of profits, while other companies will benefit just as a positive externality from consumers actions.
It is expected that people who are going out of the town for the holiday will travel a minimum of 50 miles and that overall traveling revenue will bring in upwards of 12 billion dollars.(247wallst.com)(moneyinc.com). This means consumers will increase their spending on gas, but also snacks and other miscellaneous necessities for road trips. Once consumers reach their destination, purchases on barbecuing supplies, meats, and gasoline to power boats will also increase. Gasoline alone is projected to bring in 1.4 billion dollars over this small four day period, showing just how easily this weekend can affect our economy(ucsusa.org). Surveys shows that around 62% of the population will spend their memorial day barbecuing, meaning that profits from meat, sides, and grill supplies will increase(wallethub.com).
For people who stay in town during the long weekend there are still plenty of ways for them to contribute to the spending. Knowing that sales from almost every store will be in effect this weekend, it encourages consumers to postpone buying products, with the expectations of future price decreases. Clothing stores are expected to have sales ranging anywhere from 20%-90% with extra coupons that can be added on top of that to make the opportunity cost of missing the up north trip, even more favorable for some(Dealnews.com). Homegood stores are also expected to have sales ranging from 30%-50%, increasing the quantity demanded for their products; and their revenue(Dealnews.com).
Besides increasing consumer spending, Memorial day weekend is the first chance of the summer to lower seasonal unemployment. Workers will be in high demand over this weekend for several different reasons. Many employees will want the long weekend off to party, or spend with family, but in order for companies to give workers off they need employees willing to work, creating more jobs. Employees for summer businesses will also be needed as this is the “first weekend” of summer for many. Those going up north will visit ice cream stands or small bait shops, all of which require summer employees and thus will decrease unemployment.
Overall although Memorial day weekend is a relatively short weekend, it has a large economic impact. Many companies will bring in an increase in revenue, and employers will also be hiring, helping us to reach our goal of full employment. All of this put together works to boost the economy and better its health.
Works Cited
Berr, Jonathan. "Six Reasons The American Economy Needs Memorial Day." 247wallst.com. 24/7 Wall St, 30 May 2011. Web. 15 May 2017.
"Infographic: Memorial Day - The $1.4 Billion Weekend." Union of Concerned Scientists. Union of Concerned Scientists, n.d. Web. 15 May 2017.
Kiernan, John S. "Memorial Day 2016 by the Numbers." WalletHub. Wallethub, 23 May 2016. Web. 15 May 2017.
Ramhold, Julie. "What to Expect From 2017 Memorial Day Sales." Dealnews. DealNews, 15 May 2017. Web. 15 May 2017.
"Memorial Day Travel Forecast Archives." AAA NewsRoom. N.p., n.d. Web. 15 May 2017.
It is interesting that these while the sales allow consumers to spend less on clothes, it actually gets people to spend more, overall making a larger profit at lower prices. It seems almost unfair that other stores charging at a regular price also gain larger profits, but their profits are not as high as their prices cannot compete. Despite this negative externality of slightly boosting the competitors, it is only an opportunity cost, one that is very much worth it, as their increased profits makes slightly boosting the competitor worth it.
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It's kind of odd how almost any holiday can be capitalized on these days. Memorial Day itself doesn't have much of a relation to sales or buying things, yet there's still an abundance of sales during its weekend. I don't know if its necessarily a problem, but it seems odd when businesses will take any holiday and turn it into a sales event. However, even though its unrelated, Memorial Day is around the start of the summer, so if there's any time to initiate sales of summer supplies, it would be around then. Not to mention the cook out activities that are complimented by such sales.
ReplyDeleteIt is interesting how both consumers and companies take advantage of Memorial Day and other holidays like this. I gives people and incentive to buy big ticket items, like a new TV or car, without having to worry so much about buying the cheapest one. These large sales may decrease the amount of revenue made on a product, but with the vast number of customers buying these products, companies still manage to make a nice profit. True, before these sales, customers tend to postpone their purchases of big ticket items. However, when the time comes, the amount of money made and the real GDP skyrocket.
ReplyDeleteI was very surprised to see how much just a few days can impact our economy. I also never realized how much people travel during Memorial Day, I guess because I never go that far or do much on that long weekend. The sales in the stores I feel will help our economy the most, mainly because of how low the deals are and how much people are willing to go out of their way to get to these deals. Many people will be able to buy many of the summer supplies (like outdoor decor, plants, clothing, swimsuits, etc.) in this one long weekend. Food sales will diffidently increase from this long weekend because of how much people grill out with their families.
ReplyDeleteI never realized how much stores place their products on sale during this holiday. I understand the food aspect of it all for Memorial Day is a day when so many families and friends come together to grill and have bonfires outside. However, I have never realized the clothing or speciality items that go on sale during this holiday as well. It does make sense for stores and companies to do this, to take advantage of this day for they will end up earning a greater revenue as more people come in from out of town - ultimately shopping for new summer items. This holiday will only help the economy grow for the unemployment level with decrease and more people will start purchasing more items for the holiday and new season - increasing the profit of many.
ReplyDeleteI found it interesting that so many people buy clothes this time of year. I guess it's because of the changing weather, but I had never thought about that before, or realized how many stores put items on sale. By reducing prices, consumers can spend more money, and the business benefits from this. When businesses benefit, so does the economy.
ReplyDeleteThe long weekend is most definitely a source of profit for both large and small businesses, especially those near lakes or parks. It’d be interesting, though, to compare the overwhelming profits of these businesses to those that are actually losing money over the weekend. When I worked Memorial Day last year at Panera, for example, we had maybe eight customers an hour, and ended up with a large surplus of food left over. I’m sure the total economic profits significantly outweigh those losses, but those stats would be interesting to see as well.
ReplyDeleteIt is really surprising how much money gasoline brings in, whether it be a normal day or a long weekend. I am kind of surprised how many people travel for memorial day, as I never go anywhere. I think a lot of people participate in Memorial Day sales because they can expect that all the summer essentials will only cause more and more as their demand increases during the summer. Though Memorial Day does have an impact on the economy, I can’t imagine in the large scale that much is changed from only a long weekend. Sure, people may buy certain kinds of food or shop sales, but regardless of the time of year food needs to be bought and sales will be going on.
ReplyDeleteI agree with your whole statement about Memorial Day (weekend). It's almost as if the weekend is a "summer opening" one. There are thousands of sales throughout small and big businesses for the weekend and the upcoming summer. As there are sales and stores are getting a lot of people, it is a positive externality to all. Though above Marissa did make a good point about how no matter the weekend, people will still buy food, I disagree. People may be more interested to purchase certain foods because of the time of year.
ReplyDeleteI've never realized how much people spend on Memorial Day weekend, but it makes sense. A holiday that most of the United States celebrates, and that can also lead to some parties. Lots of people buying new products, as well as foods and supplies for parties. This leads to increase in GDP, increasing profits for businesses, and leading to benefits for all people.
ReplyDeleteI think overall, any holiday, big or small, contributes greatly to the economy. People seem to use holidays as a reason to spend money on certain items that they usually wouldn't. However, I agree with Marissa and Cece that food doesn't always apply to this. Whether it be a holiday celebration or a random party that someone decides to throw for, say, the start of the school year, people will always spend money on food because it is a necessity.
ReplyDeleteThere's no question that Memorial Day is a big holiday for many. I, myself, recall numerous Memorial Days spent visiting my relatives, having a barbecue, or even just sitting around my house enjoying some television. I'm not alone in this regard, either. I have heard from others about how they have spent the day hunting, vacationing and so much more. Memorial Day serves as a time for many of us to take advantage of these goods and services available to us -- explaining why it has such a great economic impact.
ReplyDeleteI know as someone who personally travels on memorial weekend that there is a tremendous economic impact on this weekend. The highways are full of cars traveling, bars/restaurants are full and the lakes are full of boaters. One thing that I have particularly noticed going up north in Wisconsin is the large amount of people from Illinois that travel to Wisconsin for weekend. The prices at places where people from Illinois are a little more expense and there seems to be a large number of people with Illinois license plates pulled over on the side of the road. Seeing this makes me really realize how much money this Holiday impacts Wisconsin economically.
ReplyDeleteIt is interesting to hear just how economically beneficial Memorial day can be. It's weird that this one day holiday that extends the weekend requires so much more finances than others. I do wonder how Memorial Day compares to another festive holiday, such as Independence Day or Labor Day. All of those holidays require much grilling and much travel, so it would be neat to see how the numbers compare. Nonetheless, it is truly amazing how a single day can have such an impact.
ReplyDeleteI've never realized how much memorial day impacts our economy. I usually don't go anywhere or do anything during this break. I know a lot of other people celebrate this day and I can see how many companies would benefit from this weekend.
ReplyDeleteI agree that Memorial Day will help the economy in a good way. I didn't realize that traveling revenue will get around 12 billion dollars that is a lot for a weekend. It is good to see that this will create more jobs and that the workers might get paid more so they can help the economy as well by buying products and services. It also benefits stores a lot because if they have sales they will being in a lot more revenue.
ReplyDeleteI never really knew that Memorial day made such a big economic impact in the US. I usually just stay home and have a burger, but for the people that travel, they have to buy a lot of accessories since it's pretty much their first outing of the year, but I never knew that people spent that much.
ReplyDeleteNational holidays will always help the economy, it normally means a day off of work where people can take in a social event or travel to visit family.
ReplyDeleteMemorial Day weekend marks the beginning of summer activities and allows for an opportunity to have a break to go on a short trip. Especially if the weather cooperates, Memorial Day weekend includes being outdoors and barbecues. I never thought about how much money this weekend could bring in however. Between grilling supplies, outdoor activities, and gas money, the overall revenue is very high. The weekend attracts so many people to travel because it is a turning point from up and down cold weather, to warm steady weather. This includes ice cream trips and even beach supplies. Stores are able to market warm weather items that people give in to buying because of being in a great spending mood. I wonder what companies gain the most revenue in southern states where it's been warm for awhile-- I imagine they take advantage more of the getaway but in places like Wisconsin, it is a large and exciting weekend to get ready for the summer.
ReplyDeleteI never thought of how much Memorial Day can impact the economy. Thinking about all the activities and plans families make, which helps businesses generate a lot of revenue. It also marks the beginning of summer and a lot of families especially ones with college students are able to make a early summer vacation. Summer is also the time for kids to spending money every night with all the free time in their days, kids tend to spend money when they get the chance. Just the amount of money or revenue that can be lost when the weather doesn't cooperate. It also opens up job opportunities for people starting summer and the college kids that come back.
ReplyDeleteWow, I didn't know that Memorial Day had that much of an impact on the economy. It was always just a day off from school for me, but it's great to see how much the day actually does. Since a lot of revenue is made through families spending money on barbecues and such.
ReplyDeleteIt is super interesting to see all the industries that are positively affected by just one weekend - clothing stores advertising Memorial Day Sales, restaurants, and the grilling, gasoline, and travel industries. Not to mention the parade and other celebration expenses. While it is really is an important time period for businesses and kicks of the summer season, I do wish that there was a little more focus on veterans on Memorial Day. As much fun as boating, grilling, etc. are, it is important that we still remember the true purpose of the holiday.
ReplyDeleteAs I typically don’t think of Memorial day as that big of a holiday, this large increase in revenue and sales comes as a surprise to me. However it does make sense as many people do choose to celebrate this holiday. When I think of Memorial Day I think of the sales more than anything as advertising for these sales is very widespread. Due to this, it makes plenty of sense that consumers choose to buy products during these sales and increase overall revenue.
ReplyDeleteIt is crazy to think about how much money is being spent by people on this day. Roughly 12 billion on just gas for people's cars alone, which is an incredible number. There are also lots of "Memorial Day Sales" which helps companies and consumers. I personally don't think of memorial day as a very big holiday, so this much money being flowed through the economy on this due is quite surprising.
ReplyDeleteUnlike Labor day and the Fourth of July, memorial day is during the spring and school year. I wouldn't expect a holiday that is still during to school year to effect the economy that much. But, yet again any holiday that has to deal with drinking and celebrating America most likely will. Also, missing a day of school lets us kids go out and celebrate. With every kid out of school companies will be getting more business.
ReplyDeleteIt is interesting to hear just how economically beneficial Memorial day can be. It's weird that this one day holiday that extends the weekend requires so much more finances than others. I do wonder how Memorial Day compares to another festive holiday, such as Independence Day or Labor Day. All of those holidays require much grilling and much travel, so it would be neat to see how the numbers compare. Nonetheless, it is truly amazing how a single day can have such an impact.
ReplyDeleteIt is not surprising that memorial day has such an impact on the economy in the country, as so do many other holidays that we celebrate here in America. Memorial day has a common trend in the midwest of families visiting up north to lake homes, which causes a spike in gas sales, as many people drive up North. This was a good point you made in your blog, as I can relate this to my family, who has driven up North from the past many years, spending an extra amount on gas. Also, it is interesting to see the amount of food, drinks, and such that are purchased on this weekend for celebration. Like many holidays, memeorial day has in fact transitioned from a sacred holiday into an economic hallmark, as the true point of memorial day is to celebrate veterans, not to shoot fireworks and go boating with family, but I can't complain.
ReplyDeleteI never thought about how an event like Memorial Day could have such a big impact on the economy. During this time of the year, companies in the meat and barbecuing supplies business are lucky. I can see how the quantity demanded of barbecue supplies and meats would increase during this time as my family has a barbecue every Memorial Day.
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