Retailers expect consumers to spend $17.3 billion on 2016 Easter sales

After a lackluster holiday and soft apparel sales throughout the warm winter, U.S. retailers are hoping to ring up strong Easter sales of $17.3 billion this year, up more than 5% according to the National Retail Federation.

The expected spending increase of 5.48% over the $16.4 billion spent in 2015 is a record high in the survey’s 13-year history.

“Retailers are beginning one of their busiest times of year and are more than ready as consumers shop for spring essentials,” said NRF President and CEO Matthew Shay. “Shoppers will find promotions on a number of items on their lists, from Easter baskets to sports equipment, home goods, garden tools and more.”

According to the trade group’s annual survey, consumers will spend $5.5 billion on food, $3 billion on clothing, $2.7 billion on gifts, $2.4 billion on candy and $1.2 billion on flowers. The $17.3 billion spend equates to an average of $146 per person, up 3.8% from the $140.62 spent last year.

Participation for spending this year is high with 80% of those respondents surveyed by Prosper Insights & Analytics indicating they will take part in the spring holiday.

“Easter is a traditional holiday that consumers of all ages and on all budget levels celebrate with family and friends,” Prosper Principal Analyst Pam Goodfellow said. “Consumers have long lists of items they need to get their spring off to a good start. Smart shoppers plan to compare prices, research the items on their lists and take advantage of promotions on things like apparel and candy.”

The overall better economy, lower fuel prices and improved consumer sentiment all support higher spending this year. Economists say retailers look forward to the holiday because it’s a traffic driver into stores. But overall spending varies from year-to-year. For instance, Easter spending dipped to $15.9 billion in 2014, from the high of $17.2 billion spent in 2013. At the time economists at the time attributed the lower spending to more caution exhibited by consumers on the heels of a brutal winter which left them with higher than expected energy bills.

The mild winter throughout much of the county this year and fuel prices below $2 per gallon this holiday consumers are armed with nearly a 20% savings in fuel prices from a year ago. A majority of the consumers in the survey (58.6%) said they will spend the most of their Easter budget at discount stores. While 41.4% said they are headed to department stores to cash in on spring apparel sales. Another 24.7% said they prefer to shop a local small businesses. Also, 21.4% plan to shop online this holiday, up from 18% a year ago.

Retailers from Walmart to J.C.Penney are gearing up for the the holiday spend. Walmart unveiled a price rollback campaign in the past two weeks and has merchandised stores with everything from Easter baskets to Easter bonnets and holiday hams. Deutsche Bank analyst Paul Trussell said the the discounts at Walmart and Target are relatively flat year-over-year.

“Department stores however, have been highly promotional this year as stores cleared inventory after a slow start to the first quarter and are successfully driving traffic with discounting, albeit with help from the earlier Easter,” Trussell wrote in a note to investors.

For instance, he said, Penney’s recent deals included a 14-day Easter sale and a cash reward promotion. That compares to three separate three-day Easter sales in April last year. At Macy’s, the department store introduced several supplementary promotions, while continuing with its VIP and spring break sales and Nordstrom’s message was simply more markdowns, he said.

While apparel sales are expected to be strong $3.028 billion, it’s food retailers who see the biggest overall spend at $5.528 billion. The NRF survey indicates that 56% of consumers will cook a holiday meal and 58% said they will spend the day with family and friends. Slightly more than half will attend church services and 15.6% said they will go a restaurant for their Easter lunch. One in three surveyed said they take part in an Easter egg hunt which helps push candy sales up to $2.44 billion.