For many Americans, Fourth of July marks the official start of summer and based on recent surveys, most of us plan to celebrate despite the abysmal economy and 9.1% unemployment rate.
Continue Reading Below
That's good news for retailers: According to a survey by The National Retail Federation [NRF], across all categories examined, spending is expected to higher than last year.
Although 80% of us already own patriotic items such as an American flag, T-shirt, decorations, music or car decal, 1 out of 5 polled by the NRF reported they planned to buy more this year--a 16% increase from a year ago. Were also more likely to host or attend a barbecue this year, although, due to higher food prices, its going to be more expensive.
The NRF estimates that an average cookout will cost $61.62 this year compared to $54.62 in 2010. Attendance is expected to be higher this Independence Day weekend at public fireworks displays and community celebrations. And, even with gas prices hovering around $4.00 per gallon, more of us plan to drive somewhere this weekend, even if its just to a state park or local destination.
NRF spokesperson Kathy Grannis says the rebound in spending is to be expected because of cutbacks made last year for the holiday. Subconsciously, when [a holiday] comes around again, the sense is that, I didnt celebrate last year, so this year Im going to buy more [and] attend a festival. Still, she adds, given current economic conditions, Were not expecting consumers to spend an absurd amount.
Grannis also credits part of the upsurge in national pride to the recent killing of Al-Qaeda leader Usama bin Laden. Theres a sense of unified patriotism that comes after a big event. It happened after Sept. 11 and occurs every four years during the Olympics.
Continue Reading Below
Hands down, the biggest single category we will spend money on this weekend is fireworks. According to Julie L. Heckman, director of the American Pyrotechnics Association (APA), Americans spend just under $1 billion on fireworks each year and two-thirds of that comes from nonprofessionals. Consumer fireworks is where the real growth in the industry is, she says.
The APA claims backyard fireworks have never been more popular or more in demand and Heckman attributes the surge to the increased quality and safety of the products on the market. today. Since the Consumer Product Safety Commission began regulating fireworks sold to the general public 35 years ago, injuries are down by more than 90% despite the surge in usage, the APA says.
Two factors are largely responsible for the increased demand in consumer fireworks: 1) since 2002, theres been a national trend to relax prohibitions on sales and 2) the struggling economy. Forty-six states and the District of Columbia now permit the sale of at least some types of fireworks. (They are still completely banned in New York, New Jersey, Delaware and Massachusetts.) (1)
More recently, Heckman says a handful of states and municipalities have broadened the products that could be sold because they wanted the tax revenue and were tired of competing with residents driving to neighboring states to buy what they were looking for.
So, fire up the grill, slather on the sunscreen, pop a can of your favorite beverage and celebrate. Despite our problems, we live in the best country in the world. Happy Independence Day, America!
1. For state-by-state information and fireworks safety tips, visit www.americanpyro.com
Ms. Buckner is a Retirement and Financial Planning Specialist at Franklin Templeton Investments. The views expressed in this article are only those of Ms. Buckner or the individual commentator identified therein, and are not necessarily the views of Franklin Templeton Investments, which has not reviewed, and is not responsible for, the content.
If you have a question for Gail Buckner and the Your $ Matters column, send them to: email@example.com, along with your name and phone number.