Thanks to a rebounding economy, dads this year stand to get more than just a boring tie, a pair of socks or a pat on the back for Father's Day.
According to industry research firm IBISWorld, Father's Day sales are expected to total $13 billion this year, a 2% increase from 2012. Traditional Father’s Day gifts, such as automotive accessories and clothing, will take a backseat to gift choices reflecting economic recovery, like home-improvement tools. This increase is mainly due to the overall rise in consumer spending during the past year.
Special outings, like dining out and watching sporting events, are expected to account for the largest share of Father’s Day spending this year, contributing 18.8% of total holiday sales, up 3.5% from 2012. Specifically, spending at restaurants is expected to increase in revenue on Father’s Day as families go out to eat to celebrate dad.
Books, CDs, personal care products and sporting goods, which make up the "Other" category, are a close second to those special outings, and are anticipated to account for 18.4% of this holiday’s spending. These gifts are estimated to increase 2% from last year as consumers shift away from more practical gifts like clothing. Because consumers have higher disposable income levels than they did during the recession, they have more flexibility in buying discretionary gifts, such as golf clubs.
Even greeting card sales are estimated to jump; although they will only account for 7 % of total holiday spending, greeting card sales are expected to jump 9% from 2012, thanks to higher disposable incomes. Additionally, the growth in popularity of handcrafted greetings cards, driven by consumers’ willingness to spend on personalized goods, will help boost spending on this category.
Clothing and electronics, both popular, long-standing choices for dad, are estimated to account for more than one-quarter of Father’s Day spending combined. Spending on clothing, however, is expected to slightly decline as consumers change preferences and increase spending on electronics, such as an iPod touch or Amazon Kindle Fire. Gift cards will also remain a holiday mainstay this year because of their ease, convenience and their ability to let dad choose his own gift. They are estimated to account for the same amount of Father’s Day spending as they did last year at 13%.
Despite strong growth in overall spending on Father’s Day this year, spending on automotive accessories is estimated to drop 3.4% from 2012. Even though the automotive industry is expected to show signs of growth in 2013, consumer preferences for Father’s Day gifts have started to shift from car accessories to home-improvement gifts. This is because of rises in housing prices and disposable income levels, which have led consumers to put time and money into do-it-yourself home repairs. Homeowners have veered away from hiring outside workers or contractors, as they are still adhering to tight budgets after the recent housing crash. These factors are estimated to boost consumer spending in this gift category in 2013.