On Independence Day, the founding fathers politically and financially emancipated the U.S. from England. And although the country celebrates that independence very year on the Fourth of July, not much consideration is given to the economic implications of the holiday — which, it turns out, are actually substantial.
Fourth of July Weekend Spending
America’s Economy Owes a Lot to Meat and Beer Purchases
According to a 2014 National Retail Federation study, an estimated 153 million adults will celebrate the holiday by attending a cookout, barbecue or picnic. That adds up to an estimated 150 million hot dogs, 700 million pounds of chicken, and 190 million pounds of red meat and pork, according to the website Statistic Brain. The NRF expects Americans to spend nearly $6.3 billion on food items for the Fourth of July this year — a boon for grocers across the nation, who will be stocking up in advance to make sure the festivities are well-supplied.
Beer retailers will also be readying their inventory; the Fourth of July is the top beer-selling holiday of the year. A press release by the Beer Institute notes that consumers purchased $11 billion dollars of beer and malt beverages between Memorial Day and Labor Day of 2013. Not only is beer a top choice for picnics and barbecues, but according to a joint study commissioned by the Beer Institute and the National Beer Wholesalers Association in 2012, it put 2 million Americans to work. The beverage also contributed $246.6 billion to America’s economy and generated $49 billion in local, state and federal taxes.
Patriotic Gear Also Flies Off The Shelf This Time of Year
Another top purchase for Independence Day? American flags and other apparel. Although the NRF survey showed that though 60 percent of Americans already own flags and over 40 percent own patriotic apparel such t-shirts and hats, just under 40 million plan to stretch their budget and purchase a new patriotic item to add to their red, white and blue collection.
In addition to T-shirts and flags, the American Pyrotechnic Association said that consumers spent $662 million on fireworks in 2013, up from $645 million in 2012. On the other hand, communities’ expenditure on pyrotechnic displays remained relatively flat at $328 million, versus $320 million.
The economic impact on over 14,000 Independence Day fireworks displays in communities across the nation can be substantial. In San Diego, for example, the Fermanian Business & Economic Institute of Point Loma Nazarene University estimates that the Big Bay Boom July 4th Fireworks Show generates $10.6 million of total economic benefit for the local community, including $6 million that goes straight to local retail, dining and hospitality industry sales, $4.2 million in revenue for the local economy, and $370,000 in media exposure.
Similarly, the Addison Kaboom Town! fireworks display in Addison, Texas, generates over $2.5 million in restaurant revenue alone. Barbara Kovacevich, special events director for the town of Addison, said in a Business Wire release, “that’s a conservative 10:1 ROI. The economic impact could easily double if revenue generated by tourism, services and retail businesses were included.”
Gas Prices Could Put a Damper on the Celebrations
However, with all those folks out and about going to fireworks, barbecues and vacationing, the price of gas could put a damper on things. Retailers and restaurants can breath a sigh of relief. According to AAA, prices this summer are expected to remain in the range of $3.55-$3.70 per gallon, which is close to last summer’s range of $3.47-$3.67. Of course, the cost of gas could be affected by factors as diverse as international politics and the hurricane season. On the other hand, stability over seas and mild weather could result in lower-than-anticipated prices at the pump. According to the NRF, the price of gas won’t deter an estimated two-thirds of Americans from spending on Independence Day this year.
The only industries that will see a negative impact from July Fourth celebrations are banks, post offices and the stock market, all of which are closed for the day.
Photo Credit: Betty Crocker Recipes