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Mothers’ Day Economics
Each year, Kenaxa (KNXA) subsidiary, Salary.com computes how much a mother’s work is worth. The Web site factors mom’s typical role as housekeeper, cook, day care center teacher, facilities manager, computer operator, van driver, psychologist, janitor, laundry machine operator, and CEO (These categories are based upon an annual survey of what a mother’s primary job description entails.) According to Salary.com’s estimate, for 2013, the national median salary for stay-at-home mothers is $113,586 (including overtime), and working mothers should be compensated $67,436, on average, in addition to money earned outside the home.
It is no wonder then, that Americans will spend $20.7 billion this year thanking their mothers, for their time – and overtime – devoted to their families and homes on the second Sunday in May, according to the National Retail Federation (NRF). Even though many more people made homemade gifts during the height of the recession, Americans have returned to stores to help them express their gratitude. What's more, this year, thanks to greater consumer confidence and better discretionary spending levels, the NRF looks for Mothers' Day spending to climb approximately 11% from last year's figure. In all, the number of greeting cards, presents, and the number of families that will dine out this May 12th in honor of the 85.4 million mothers in the U.S. will make the springtime festival an important economic driver this year.
A Holiday is Born
In 1865, Ann Jarvis aimed to reunite families who had been divided by the just-concluded American Civil War. She formed a committee to establish “Mother’s Friendship Day,” which she hoped to expand as a national memorial for mothers. In the following two decades, several women’s peace groups created local observances to commemorate mothers whose children fought and died on both sides of the Mason-Dixon Line. By 1872, poet Julia Ward Howe led a Mother’ Day anti-war observance in New York City, and for the next ten years, she personally sponsored the observance in Boston. And in the early 1880s Albion, Michigan set aside the second Sunday in May to commemorate mothers and women’s contributions to society.
Anna Jarvis continued her mother’s effort. She held a memorial service in 1907 in Grafton, Virginia, where her mother taught. The following year, Philadelphia merchant Wanamaker, helped her make it into a larger ceremony. Jarvis continued to campaign to establish Mother’s Day as a national (and international) holiday. In 1914, Congress designated the second Sunday in May, and President Woodrow Wilson proclaimed that Americans should fly their flags in honor of the mothers who lost their sons in war.
At the first ceremony, in 1908, Ann Jarvis’ daughter Anna Jarvis used 500 carnations (her own mother’s favorite flower). This flower is often used to represent the holiday, and some wear white (commemorating those that have passed on) or red (celebrating the living) carnations to commemorate their moms. Many more buy fresh blooms as a thank you to mom. In fact, more flowers are sold on Mothers’ Day than on Valentine’s Day. Even though the price of stems rises in early May, in line with the excess demand, the holiday is still a boon for florists, especially for online retailer 1-800-Flowers (FLWS).
The commercialization of the holiday began soon after President Wilson’s declaration. In fact, Anna Jarvis spent much of her life opposing the “Hallmark Holiday” reputation. She also shunned the practice of relying upon either Hallmark or American Greetings’ (AM) stationary, preferring the composition of personal letters.
And for those that don’t write, telecom companies have noted a spike in national and international call volume on the second Sunday in May. The holiday usually follows Christmas and New Year’s in call volume. (Interestingly enough, in past years, Father’s Day marks the highest number of collect calls.)
Still, many more will purchase gifts for their mothers, grandmothers, wives, aunts, or sisters. While some may visit jewelers like Tiffany’s (TIF) and Zale’s (ZLC) or peruse online jeweler Blue Nile (NILE), others may make trips to big retailers like Macy’s (M), Saks (SKS), or Nordstrom (JWN) to buy baubles, perfume, or clothing for the important women in their lives.
Likewise, Mothers’ Day is one of the most popular days of the year for families to go out to eat. Some may use OpenTable (OPEN) to reserve a lunch or supper table at various restaurants, and given the ubiquity of group deals vendors like Groupon (GRPN) and Living Social, families may rely on coupons to help settle the bill. Other companies that now offer local coupons, such as Amazon (AMZN) and Google (GOOG), will likely market restaurant deals or gift ideas, as well.
Even though stocks may not be as tied to Mothers’ Day’s apron strings as they might be to other national celebrations, we believe these companies stand to benefit from increased business associated with the day dedicated to mothers and nurturers across the country. For more information, subscribers should peruse out full-page reports on the aforementioned companies in The Value Line Investment Survey and keep an eye out for Supplementary Reports when breaking news hits.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.