This Mother's Day Could Be a Happy One for Retail, Relatively Speaking

Last Updated Aug 26, 2010 2:40 PM EDT

Usually, Mother's Day is focused on flowers, hugs and phone calls, but this year the occasion also is about the health of the retail-sales recovery.

Mother's Day is a big deal for retailers. It's the second biggest spending holiday after the annual December celebrations, generating almost $15 billion in sales, the National Retail Federation states, and Mother's Day 2010 may be a good one. If this weekend's holiday arrives with a big sales boost, the critical year-end holiday period could arrive with some momentum behind consumer spending. If consumers won't surrender their cash for mom, prospects for the year ahead don't look bright.

IBIS World forecasts Mother's Days spending to gain a little over four percent this year, with all major gift categories improving. Clothing and electronics should see the biggest gains, up seven and six and a half percent respectively, the market research firm predicts. Following those designations are jewelry and outings at five percent, personal services at four-and-a-half percent, flowers at four percent and gift certificates at three percent.

On deeper examination, retail prospects look better news than they initially appear.

"A growing number of consumers are willing to pay premium prices for products again, meaning that deep discounting is no longer the only technique driving retail traffic," said Toon van Beeck, a, senior analyst with IBISWorld. So, Mother's Day sales this year will be more profitable.

NRF expects consumers to spend $126.90 on Mother's Day gifts this year versus $123.89 last year.

Consistent with the IBISWorld notion of a more generous Mother's Day shopper, upscale retailers should do better this season than last, with department stores garnering almost 37 percent of sales versus 27 percent last year. That represents a pretty significant turn around, as it boosts department stores beyond the expected percentage of spending at discount stores, 30 percent. Trailing those retailer sectors in Mother's Day spending are online, 20 percent, specialty clothing, store six percent, and catalog, two-and-a-half percent.

Seemingly good news all around. Still, keep in mind that Mother's Day spending was down 15 percent last year from 2008, so at a four percent growth rate it would take until 2013 for sales to return what they were two years ago. The retail recovery looks like it's well underway, but the road back reckons to be a long one.