BY BRAD PLOTHOW
Published: May 3, 2018
Typically, cultural exchange happens when places are close together. Texans adopting Cinco de Mayo, for example, makes sense given the proximity. So, what gives with Alaska’s spike in consumer spending on the popular Mexican holiday?
The data science team at Womply, a company that helps small businesses with reputation, customer, and business solutions, recently analyzed transactions at 26,000 local, independent restaurants in all fifty states during every day of the 2017 calendar year. That allowed the organization to spot trends in consumer spending. One surprising discovery: Cinco de Mayo is the very best sales day of the year for local eateries in Alaska, and it’s not even a close race.Typically, cultural exchange happens when places are close together. Texans adopting Cinco de Mayo, for example, makes sense given the proximity. So, what gives with Alaska’s spike in consumer spending on the popular Mexican holiday?
According to a Womply report, an average day for the typical restaurant in Alaska looks like this: twenty-four transactions at $34 per order for a daily take of about $812. On Cinco de Mayo, Alaska eateries go bananas (or tacos?), spiking to forty-one transactions at $39 per order for a daily haul of more than $1,600.
That’s right—restaurant sales double on Cinco de Mayo in Alaska. Nationally, Cinco de Mayo is a big day for restaurant sales as well, ranking number 36 among all 365 days of the year. That puts it ahead of Valentine’s Day (ranked 107), New Year’s Eve (84), and the Super Bowl (274). Still, at a national level sales only increase 37 percent compared to 98 percent in Alaska.
Regarding sales on Cinco de Mayo, Alaska is in rarified air. Only seven states have Cinco de Mayo as their top restaurant revenue day of the year; Alabama, Indiana, Kentucky, Massachusetts, Nebraska, and West Virginia join the Last Frontier in the honors.
So, what’s going on to make this celebration of Mexican armies fending off the French such a boon to local businesses, especially one so far from Mexico itself? It’s hard to say. As a software provider to Main Street entrepreneurs, Womply has analyzed billions of data points on millions of American small businesses. The company is constantly surprised by how often reality defies assumption, whether it be slow sales on the Super Bowl, the boost small retailers get on Black Friday, or how resilient small business sales are after a hurricane hits.
When it comes to the restaurant business, it’s actually one of the most predictable industry segments out there. There’s very little seasonality, with relatively stable patterns across the days of the week and months of the year. As one might expect, sales are higher on the weekend, but what’s perhaps unexpected is that the average weekend is usually more impactful to sales than big holidays. People have routines when it comes to eating out, it seems.
Nationally, the one exception to this rule is Mother’s Day, when a whopping 44 percent of all small restaurants nationally have their best sales day of the year. Mom’s big day ranks number one nationally, tops the revenue charts in thirteen states, and is a top ten day for twenty-eight states. Not so in Alaska, where Mother’s Day ranks number 93, with a modest 20 percent bump in sales.
This isn’t to say that Alaskans love a Mexican holiday more than their own moms, and diagnosing why one day is better than another is an imprecise science. Often cultural norms are the most powerful drivers of consumer behavior, and shifts in those norms can lead to surprising patterns in how and where people spend money.
For example, after the New England Patriots won the Super Bowl in 2017, Boston bars and lounges saw a massive spike in sales while their counterparts in Atlanta languished after a Falcons loss. Last February, the tables turned, with Boston fans punting on local bars while Philadelphia establishments raked in the green after an Eagles upset in the NFL’s crowning event.
The point is, it’s difficult to uncover exactly what led to Alaska’s fascination with Cinco de Mayo, and there are plenty of factors that could lead consumers to pick another day as their go-to day for going out in the future. But if history is any indication, May 5, 2018, is shaping up to be a massive money-maker for restauranteurs from Homer to Juneau to Fairbanks and everywhere in between.
Brad Plothow is VP of Brand & Communications at Womply, a technology company serving more than 100,000 small businesses in all fifty states, including hundreds in Alaska.