I expect this to be a rather muted Memorial Day for retail. While many will shop, all of our consumer survey data show that most will be sticking closely to planned purchases and their spending will be reliant on them receiving big discounts and good deals. The one area that is more favorable is travel and leisure – both of which sit largely outside of core retail. This represents an ongoing shift from people buying things to prioritizing experiences.

For some, I think Memorial Day has arrived more quickly than in the past. Why?

1) Above-average temperatures have been projected to persist and with that there is an anticipation of summer.
2) With pronouncements of the end of the COVID-19 pandemic, there was a collective sigh of relief that caused an additional return to normalcy.
3) The economy is causing some to adjust their plans and/or purchase earlier, favor discounted prices, or simply stock-up prior to the holiday.

Retailers continue to be pressured by lingering effects of supply chain disruption, ongoing labor challenges, and the dark cloud hovering over the U.S. debt ceiling. Factors such as these also put shopper behavior into a tail spin. I believe retailers feel they are as ready as they can be … but I envision some reeling to follow this weekend and extend through July 4 as many struggle to regain their footing.

There’s been turmoil in the retail world over the past three years with the pandemic, economy, and supply chain. It has been a struggle, to say the least, for manufacturers and retailers to keep the shelves full. Shoppers have, unfortunately, become accustomed to disappointment. When products are constantly out of stock, it means an immediate loss of sales. It’s especially damaging if there is no indication of when items will be back in stock and available for purchase. So, it’s in everyone’s best interest to greet shoppers with fully stocked shelves. This Memorial Day and Back to School should be in good shape as pricing has come down, especially in the all-important meat category.

Retailers appear ready to go for the start of the holiday season. Consumers staying close to home suggest that they will be stocking up on food, plants, home decorations, and so on. The test for retailers is how they have adapted in a supply chain-constrained world to ensure that they can meet consumer demand. This summer will be one of the first tests of that resiliency.

With the continued uncertainty in the global economy, relentless inflation, job security concerns, the war in Ukraine, and an overall consumer confidence dip, we should expect a marginal sales performance over the Memorial Day weekend. There has been a significant shift to conscious consumerism, where customers are buying more essential items and focusing more on spending on experiences, including travel, restaurants, and concerts, rather than more products.

Thankfully the supply chain disruptions have stabilized, and retailers are well-positioned for steady sales growth throughout the summer. Several retail sectors, including luxury, off-price, and dollar stores, will thrive despite any economic headwinds this Summer. It will be interesting to see how things play out in the coming weeks and months.

Pandemics. Then inflation. If the last few years have taught us anything, over-the-top celebrations are a thing of the past. There is a greater appreciation of just enjoying the opportunity.

Retailers should be ready for a repeat of last summer. The real question is if less emphasis on holidays (all holidays) will become the new normal.

“Well prepared” begs a long list of questions. A simple question might be about inventory levels and solved supply chain issues. A more complicated question looks at how the retailer is evolving to meet changing customer expectation. Walmart is succeeding. Express isn’t. But the one I find most interesting is Abercrombie & Fitch. Their recently announced numbers suggest they are not just ready, but are again ahead of the curve in evolving to a new attitude/aesthetic and the role they have in their customers lives. It’s one of the most dramatic transformations I have seen in a long while.

Stores appear well stocked with summer-themed merchandising aplenty. Consumers on the other hand are more frugal in their spending, as they tighten their purse strings seeking deals wherever they can find them.