PORTLAND, Ore. (TheStreet) – When retailers and restaurants rely on sun and fun to drive the majority of their sales, the approaching winter can be especially harsh.
No retailer has it particularly easy when Labor Day passes and the kids get out of school. While holiday sales help a bit, the fall and winter months that bookend them are some of the bleakest on the retail calendar. As the Census Bureau makes abundantly clear, shoppers since the recession have no problem spending during the summer months and in much of November and December heading into the winter holidays, but basically freeze spending from January through April and go into a brief hibernation in September and October.
It's why you see Halloween decorations on the floor at Costco in early August and Christmas decorations there and at Wal-Mart, Macy's, JCPenney and elsewhere just after Labor Day. It's also why stores push their after-Christmas sales in January and car dealers tout Presidents Day deals in February. The winter weather is bleak and the spending is miserable. If you're considered a “seasonal” business, however, that spending is just about nonexistent.
That doesn't fly in an ever-connected global marketplace that just doesn't account for downtime. As a result, companies that used to be just fine waiting for May and holiday sales to crank up find themselves looking for ways to fill their retail calendar. The folks at market research firm IBISWorld looked into seasonal industries and found five that have adapted to changing times.
Roller coasters, water parks, drive-through safaris: Just about none of those are particularly fun during the fall and winter, when their youngest patrons are stuck in school and older customers have better things to do than freeze on high-speed, high-elevation rides.
The larger amusement park chains get around this by setting up shop in warm-weather locations and letting the shivering masses come to them. When school schedules or slow vacation accruement get in the way, chains including SeaWorld, Universal and DisneyParks simply slash prices and offer hotel deals.
That just doesn't work if some of your biggest parks are in the Northeast or along the Great Lakes. Six Flags, which operates 16 amusement parks in the United States and holds a 6.4% market share, earns 80% of its revenue between Memorial Day and Labor Day. It's a similar case for Cedar Fair, which operates 11 amusement parks in North America and has one of its largest, Cedar Point, right on Lake Erie in Sandusky, Ohio.
So how do you get around it? Well, you could either try to boost peak-season revenue by offering tiers of season passes to increase visitor volume. Or you can do what Cedar Fair did and open an indoor water park such as Castaway Bay, which sits right next to Cedar Point. Six Flags used a similar tactic in Queensbury, N.Y., when it opened the indoor White Water Bay just across from its Great Escape amusement park near Lake George.