Celebrations
The Fourth of July in the U.S. celebrates the power of individual choices – and sparks a whole lot of spending as well.
The stock market comes to a standstill as Americans commemorate the day when Congress adopted the Declaration of Independence in 1776 (even if the actual document was probably signed nearly a month later). But on this federal holiday, the nation is buzzing with economic activity.
This year might even be the busiest one yet, expected to break travel records. Nearly 70 million are predicted to head over 80 km from home between 29 June and 7 July. Many try to take advantage of remote work and make it a week-long break, with Hertz ($HTZ) projecting 28/29 June and 3 July to be peaks for car rentals. And with 6,540 flights planned, it could be the most frenetic stretch of the summer for American Airlines ($AAL).
Celebrations are on the cards for around 87% of the country, the same percentage as last year. Two thirds intend to enjoy the summer weather with some kind of outdoor cookout. However, the Rabobank BBQ Index has brought some unwelcome news to the party. It has found that the average cost of hosting a ten-person barbecue rose to US$99, up from US$87 last year. Higher beef, soda, lettuce and potato chip prices are a few of the culprits.
Choosing chicken might be cheaper, but the real food icon of the day is the humble hotdog, with sales increasing approximately 20% each July and 150 million being purchased on the day alone. Walmart ($WMT) made sure to include hotdogs in its budget-friendly cookout pack, costing less than US$50 for eight people. Meanwhile, Kraft-Heinz ($KHC) not only sells the accompanying sauces but reportedly puts a valuation of between US$3b and US$5b on its hotdog brand Oscar Mayer in a potential sale
Higher prices appear to be cooling down demand for fireworks, after a dazzling post-pandemic boom. Still, around a third of celebrants buy these explosive materials, and imports are still forecast to amount to US$350m this year. On the ground, red, white and blue should dominate events, with 19.1% of Americans buying decorations for the occasion. The retail sector is spurred on further by Fourth of July sales, which are commonplace and have eagle-eyed shoppers looking for bargains that could rival those of Prime Day on Amazon ($AMZN).
Fireworks, parades, picnics and barbecues might attract a lot of fanfare, but Independence Day is really a reminder of the freedoms enjoyed by the American people. It just so happens that many of these freedoms come with a price tag.
