Breaking routine is a desire for most people on the planet. Therefore, we long for celebrations, holidays and special occasions. All of them have to include presents, special meals and outfits, which always cost a lot. Trying to satisfy consumer demand, retailers respond by designing holidays and adjusting their products for the occasion. Prices for special items increase disproportionately as the day approaches, peaking on the last day before the holiday, when people are ready to queue and pay any price in order not to miss the last chance to impress the beloved ones and to join the celebration. On the one side, this practice generates incredible profits for the retailers and manufacturers. However, it also reduces consumer savings and decreases subsequent consumption. Therefore, it benefits the firms in the short-run, however creates obstacles for long-term growth by decreasing savings, and thus reducing the amount of money available for investment and further economic development.
All people want to make every holiday memorable, giving little thought to the cost of the celebration. The demand for holiday items increases more and more as the day approaches, while drastically falling already on the next day Therefore, retailers can significantly increase their prices in order to maximize profits, as on the next day all the unsold items will lose their relevance. Moreover, most of the unsold items will likely be trashed, thus becoming a source of inefficiency in the economy. However, the sales generated during a few days preceding holidays exceed the cost of the unsold goods by a huge margin. In some industries profits obtained during holidays account for as much as one fifth of the annual profits. This money gives businesses a huge cash inflow, which is further used for growth and development. Companies in return provide additional jobs, pay taxes and increase economic well-being of the country. Therefore, even if the holidays have been designed by the retailers in order to generate additional profit, today industries affected by the holiday season and society enjoy the mutual benefits of the holiday season.