Using the 4-5-4 calendar is an essential for next year
Today’s retailers strive for consistent year over year planning and reporting. Since the 1940s, they have been using a 4-5-4 week format to create consistent months and quarters. Only one problem … this format only accounts for exactly 52 weeks and 364 days. So, about every 6 years retailers have to add another week to the year. 2012 is one of those retail years with 53 weeks, and New Year’s Day in retail is Dec 29th!
Why do retailers use a 4-5-4 Calendar?
Like most businesses, retailers used a standard monthly calendar to run their businesses for decades. By the 1940s, retailers were growing in size and aggressively advertising sales on weekends. As sales increasingly shifted to Saturdays and Sundays, retailers needed to more carefully plan and track weekends.
The problem with traditional monthly calendars is that the number of weekends in certain months varied from year to year. In order to plan ads and supply chain fulfillment, retailers needed comparable months that were consistent year over year. By adopting a calendar with consistent weeks per month in a 4-5-4 cycle, retailers and analysts can improve information, accuracy and forecasting.
So, why does 2012 have 53 weeks?
Creating a 4-5-4 calendar improves year over year consistency and accuracy, but it only has 364 days (52 weeks X 7 days = 364). Since it takes mother earth 365 and a fraction to complete its revolution around the sun, the 4-5-4 calendar quickly gets out of sync.
In order to maintain the 4-5-4 monthly format and stay in sync with the solar year, it is necessary to add a 53 week to make up the difference. This anomaly occurs approximately every 5 or 6 years. 2000, 2006 and 2012 are all 53 weeks years for retailers on the 4-5-4 calendar.
4-5-4 Retail Calendars are published by NRF
The National Retail Federation (NRF) publishes the guidelines for the retail 4-5-4 calendars with retail week numbers throughout the year. Calendars are already available for 2012 through 2014. The NRF calendar shows that 2012 begins on Dec 29th and ends on Jan 2nd.
NATIONAL RETAIL FEDERATION
2012 RETAIL SALES REPORTING and
4-5-4 MERCHANDISING CALENDAR (2012 Not Restated)
* Fiscal Year 2012 is a 53 week year. 2012 should be restated for comparability to 2013.
** Green shaded boxes indicate a Sales Release Date. Black shaded boxes indicate the following Holidays: Valentine's Day, Presidents Day, Easter, Mother's Day, Memorial Day, Father's Day,
Independence Day, Labor Day, Rosh Hashanah, Yom Kippur, Columbus Day, Halloween, Election Day, Veterans Day, Thanksgiving, Christmas, New Year's Day, and Martin Luther King Day.
*** Rosh Hashanah and Sales Release fall on 9/5/13.
Vendors, you had better know what day it is in retail!
The interesting challenge for vendors is that few of them end their fiscal year at the end of the calendar. But, in reality it doesn’t matter. The key is adopting a planning calendar that is on cycle with how retailers plan. The good news is that many vendors appear to be incorporating a 4-5-4 planning calendar. In fact, one of our most searched blogs in our Results Count archives is titled: “What week is it in retail?”
Retail is detail more than ever today. It requires precise planning, analytics and forecasting. If vendors are not in sync with their retailers’ calendar, they are literally not in the game. The 4-5-4 calendar is literally a prerequisite for doing business profitably with large retailers today.
What calendars do e-tailers use?
No one is quite sure what the future holds for online e-tailing. In the case of web sales, peak volumes do not necessarily fall on weekends, but on Monday’s or during midweek. However, many top e-tailers also have stores, so they typically use a 4-5-4 calendar for planning supply chain and reporting sales.
All retailers strive for consistency in data in order to establish year over year comparatives in reporting. So, many e-tailers also use the 4-5-4 calendar for consistent reporting, even if they focus on Cyber Monday instead of Black Friday.
What does all of this calendar stuff mean for you?
One thing is for sure … consumers determine when the cash register rings! While the 4-5-4 calendar is essential for optimizing retail planning and execution, the most important “calendar “ for you is the one that you use to make purchase decisions. As a consumer, you might find however that retailers do become more aggressive in promotions and discounts as they end their 4-5-4 calendar quarter.
If you want to get a head start on the New Year, then you might want to adopt the retailer 4-5-4 calendar and start celebrating on Dec 29th, which kicks off 2012 in what will be a very interesting year for retail.
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