While most rely on a 12 month calendar, the retail industry follows the 4-5-4 Calendar. The 4-5-4 Calendar was developed in the 1940s after Saturdays and Sundays emerged as a large percentage of retail sales. The straight calendar that was being used to report monthly sales had a varying number of weekends per month year-to-year, which caused a problem. Retailers necessitated a calendar that maintained the same number of weekends in comparable months and, as a result, the 4-5-4 Calendar was born.
As a voluntary guide for the retail industry, the 4-5-4 Calendar enables retail sales comparison between years by dividing the year into months based on a 4 weeks – 5 weeks – 4 weeks format. According to the calendar (as seen below), a retailer’s year starts in the first full week of February—the format aligns holidays. As a result, like days are compared to like days for sales reporting purposes. The 4-5-4 Calendar also establishes Sales Release dates, which have historically been on the first Thursday following the month’s end (noted in green). In recent years, however, as the flow of information has improved, more companies are releasing sales data earlier in the week.
Calendar shifting is especially relevant this year, as landmark retail dates fall at notable points including:
- Easter (April 5): two weeks earlier than in 2014
- Memorial Day (May 25): earliest possible date
- Fourth of July: falls on a Saturday
- Labor Day (September 7): latest possible date
- Halloween: falls on a Saturday
- Christmas: falls on a Friday
The shift in dates, as illustrated by Easter 2015 falling two weeks earlier than last year, will have a significant effect on retailers’ activities—marketing, promotions, inventory and staffing—surrounding the holidays. It is vital for retailers to be aware of such shifts well in advance in order to make the most of potential revenue during holiday sales.
In our next post, we will take a comparative look at 2014 and 2015 Easter promotions, which will illustrate the effects of calendar shifting.