Retailers fail to cash in on Father's Day

Why? Because receiving automotive accessories, tools and home improvement products is about as exciting as watching oil drain or plaster dry.

By TheStreet Staff Jun 13, 2011 11:50AM

Image: Father with family (© Rayman/Photodisc/Getty Images)By Jason Notte, TheStreet

 

Father's Day in the retail world usually means unloading ties, steering-wheel covers and electronic gadgets onto frazzled gift givers, but dads really get the same thing every year: second billing.

 

Father's Day was a $10 billion holiday last year, according to market research firm IBISWorld, and is expected to jump 4.6% to $10.8 billion this year. Fathers will get $1.4 billion worth of clothing, $1.3 billion in gift cards and $2 billion in dinners and trips to the ballgame, but they'll still fall roughly $4.8 billion short of the $14.9 billion in gifts their counterparts get on Mother's Day.

 

For perspective, Mother's Day ranks fourth in holiday spending behind Christmas ($135 billion), Thanksgiving ($30 billion) and Valentine's Day ($17.6 billion). If not for Halloween ($6 billion), Father's Day would be dead last among retail holidays.

 

Even with retail spending up 8.1% year to date over the same period last year, retailers are still loath to leave nearly $5 billion on the table. It's not that retailers have stopped pushing Father's Day purchases or have launched some conspiracy against American patriarchs: They're just not expanding their horizons.

While some fathers may appreciate the combined $470 million in automotive accessories and $1.3 million in tools and home improvement products they'll get from Father's Day displays at AutoZone (AZO), Lowe's (LOW) and Home Depot (HD), those gifts are about as exciting as watching oil drain or plaster dry.

 

"Retailers have been less creative about Father's Day," IBISWorld retail analyst Janet Shim says. "Especially in the last three years during the recession, when people were cutting back on spending overall, they really weren't able to capture that discretionary spending."

 

There's a little more to go around this year, which has helped retailers get the creative juices flowing. The National Retail Association estimates that Americans will shell out an average of $106.49 on Father's Day gifts, up from $94.32 last year. As a result, such companies as 1-800-Flowers (FLWS) have begun offering Father's Day gifts baskets of barbecue and movie items to help get a piece of Mother's Day's $1.3 billion in floral spending.

 

That's not exactly closing the gap, though, as the NRF also found that Mother's Day spending increased from an average of $127 per person last year to $141 this year. Even in typically father-friendly spending categories, Mother's Day electronics spending trumps Father's Day's by nearly $300 million. Home and garden spending, meanwhile, also favors moms by more than $100 million. If stores are pushing the same items as gifts for both parents, there's likely another reason for the spending disparity.

 

"I really don't think it's the retailers who are promoting these events thinking mom is more important than dad," says Kathy Grannis, spokeswoman for the National Retail Federation. "We've found that it's the consumer who shies away from really going all out for dad."

 

Yep, kids of all ages have made an annual tradition of shortchanging dad. The average spending divide between the two parental greeting card holidays has fluctuated between $30 and $50 per person since 2007, according to the NRF. A survey by credit firm Experian's shopping site, PriceGrabber, says that won't improve this year, as 45% of consumers plan to spend the same amount as last year on a Father's Day gifts, while 11% plan to spend less.

 

Of those who plan to cut back, 33% cite the economic environment, 22% are doing so for personal reasons and 14% cite higher gas prices. Fathers aren't getting stuck with practical gifts because that's all stores want to sell: They're victims of their offspring's post-recession spending habits and inability to fill the tank.

 

"Frugality seems to be the trend of the moment, regardless of whether Dad is receiving the gift rather than mom," says Graham Jones, the general manager of PriceGrabber. "Given that Mother's Day and Father's Day are roughly six weeks apart from each other on the calendar, this leaves little room to set aside funds or experience a change in economic abundance between the two holidays."

 

Grannis notes that fathers tend to defer to mothers when it comes to the holiday spending, mostly because of the rigors that come with the job but partially because the items you can get a mom for the money tend to be much prettier. Even before the economic downturn, mothers got the majority of the royal treatment on the two holidays because of one key segment: jewelry.

While dads made do with $600 million in sporting goods, jewelry sales constituted $3 billion of the $14.8 billion spent on Mother's Day. Necklaces, earrings, tennis bracelets and other baubles account for roughly 75% of the spending gap alone. Unless the nation's fathers develop a 2000s-era hip-hop-style fascination with all things sparkly, that spending separation should stay in place for years to come.

 

"There's the business factor in that the gifts people buy Mom tend to be more expensive," Grannis says. "If it was OK to buy Dad a diamond necklace and roses, we might see the same kind of spending."

 

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