What Is a 4-5-4 Calendar?
The 4-5-4 calendar is a tool used by retailers that displays each sales quarter in blocks of 13 whole weeks. The numbers 4-5-4 refer to the number of weeks being compared in a month year to year.
Laying out the calendar this way keeps holidays lined up for more accurate sales tracking. It also ensures the same number of Saturdays and Sundays (larger sales days) in comparable months.
The 4-5-4 Calendar vs. Traditional Calendar
Why not just use a traditional calendar to measure sales year to year? Isn’t it easier to simply compare sales in April to sales in April of last year?
That’s exactly how retailers used to report sales. The issue with reporting this way is weekend sales. It didn’t take long for business owners to discover that Saturday and Sunday accounted for a large portion of retail sales as they still do today. Because the number of Saturdays and Sundays can vary in a single month year to year, sales performance could not be tracked accurately. Sales could grow or fall dramatically not because of performance, but simply because of how the weekends fell in a traditional calendar.
The solution was the development of the 4-5-4 calendar used today. It is a tool that has been voluntarily used by retailers since its launch in the 1940s.
Accepted Use of the 4-5-4 Calendar
As just stated, the 4-5-4 calendar is voluntarily used by retailers to accurately track sales from year to year. However, some businesses use a similar tool with slight variants.
Depending on the retailer, some may use a 4-4-5 calendar. Both calendars are laid out in block style to keep weeks consistent. Both week patterns are repeated four times throughout the year. The only difference is in the pattern of the weeks.
Whether 4-5-4 or 4-4-5, it is strongly recommended that all retailers use this type of tool for accurate sales reporting. Businesses not currently using a retail calendar and wanting to switch will need to take note of how retail months differ from traditional calendar months.
To maintain a block of four or five weeks per month and seven days each week, months may overlap. For example, the first few days of November in the traditional calendar may be included as part of the last week in the October retail calendar.
More Than Sales Tracking
The primary development and use of the 4-5-4 calendar were to help retailers track sales accurately year to year. As with all great tools, more benefits have been discovered by using it over time.
Along with more accurate sales reporting, the 4-5-4 calendar is a useful aid in making decisions about monthly payroll and keeping better records for accounting.
In terms of merchandising, the 4-5-4 calendar helps retailers better control their inventory levels. When routinely done using the calendar, tracking store inventory and taking the monthly inventory can be accomplished more accurately.
4-5-4 Calendar Starting a Month Late
January is the first month in a traditional calendar. When looking at a 4-5-4 retail fiscal calendar, the first month is February and the year ends in January of the following year. This is why retailers refer to the current year as to when the fiscal year ends. For example, the year 2021 is also FYE 2022 (Fiscal Year Ending 2022) since the last month of 2021 in the fiscal calendar is January 2022.
Why track a fiscal year one month off? Why not just let the first month of a fiscal year be January and end in December? The answer is simple: holiday sales.
December is the busiest shopping month of the year. More gifts are bought in December than any other month. This results in January seeing the largest number of returns for the year. The reason retailers want to begin the fiscal year in late January or February is to account for all the holiday returns. This allows them to avoid beginning the year having to factor in a giant loss on returned merchandise.
The 53-Week Year
Some 4-5-4 calendars may seem odd at first glance as they can contain 53 weeks. How is this possible when a standard year only has 52 weeks?
The 4-5-4 retail calendar is laid out in perfect blocks. That means there are only 52 weeks and only 7 days in each week. Mathematically, that accounts for just 364 days. With one whole day remaining in the year, not to mention factoring in February 29 every four years, 52 weeks is not enough. Retailers have to include the extra 53rd week at the end of the retail fiscal calendar for sales reporting accuracy. It only happens about once or twice in a decade, but crucial to keeping year-to-year sales comparable.
Conclusion
All retailers and suppliers should be using a 4-5-4 calendar to report and compare annual sales accurately. Not only is it better for business, but it allows businesses to become better partners and have a common tool in aligning sales goals.
Walmart Stores uses the 4-5-4 fiscal calendar and often refers to major events as Walmart Weeks on the calendar. Rarely will a Walmart buyer say that a modular sets on August 9; they’ll say the modular sets Week 28.
To keep up with Walmart Weeks, Quarters, the 4-5-4 layout, and year-to-year comparisons, 8th & Walton has created a Walmart 4-5-4 Planning Calendar free to download. If you have questions about the calendar or need help in your Walmart sales reporting, get a free consultation from 8th & Walton’s Walmart experts this week
