The Memorial Day Effect: How Seasonal Shifts Are Hiding Undervalued Retail and Energy Plays

The Memorial Day weekend has long been a bellwether for American consumer behavior, offering a snapshot of how Americans spend, travel, and prioritize their budgets. This year, the data reveals a landscape of shifting priorities and hidden opportunities in retail and energy sectors—a story that investors would be wise to heed. Let's dissect the numbers to uncover where value lies.

The Retail Play: Walmart's Dominance and the Rise of Value-Driven Shopping

Memorial Day 2024 saw consumers tightening their belts while prioritizing essentials. According to RetailMeNot, 36% of shoppers participated in Memorial Day sales—up 18% from 2023—but spending per person fell to $289, an $8 drop. The decline in discretionary spending, particularly on clothing (49% planned cuts), signaled a pivot toward practicality.

Walmart (WMT) emerged as the undisputed leader here. Its online sales surged 11% year-over-year to a 62% market share, driven by its ability to offer discounted essentials like outdoor gear, food, and home supplies.

The data tells a clear story: Walmart's focus on affordability and supply chain efficiency is paying off. Meanwhile, competitors like Lowe's (LOW), which saw online sales drop 3%, are struggling to adapt to this value-first mentality.

For investors, Walmart isn't just a retail titan—it's a hedge against inflationary pressures and shifting consumer habits.

The Energy Opportunity: Lower Prices, Regional Disparities, and Refining's Edge

Gasoline prices for Memorial Day 2024 averaged $3.58/gallon, down 2% in real terms from 2023. This decline, fueled by OPEC+ production increases and easing Middle East tensions, has reshaped the energy sector.

The regional divide is stark:
- Gulf Coast: Prices hit $3.11/gallon, the lowest in the nation, thanks to abundant refining capacity and low taxes.
- West Coast: Prices remained elevated at $4.62/gallon due to California's stringent fuel standards and limited refineries.

This disparity creates an investment angle: refiners in low-cost regions like the Gulf Coast could see margin improvements as crude prices stay depressed. Take Valero Energy (VLO), which operates 17 refineries in the U.S., including three in Texas. Its refining margins (per barrel) have historically expanded when crude prices drop, as they did in 2024.

Meanwhile, ExxonMobil (XOM), with its diversified upstream and downstream operations, benefits from both stable crude supply and refining efficiency.

The Contrarian Bet: Home Depot's Resilience in a Volatile Market

While Lowe's (LOW) faltered, Home Depot (HD) managed a 5% sales increase in 2024—a testament to its focus on outdoor and home improvement essentials. The Memorial Day data shows 17% of spending went to home projects, with bug repellent (+130%) and pool floats (+96%) surging.

Home Depot's dominance in this category—bolstered by its inventory depth and geographic reach—positions it as a safer bet than its competitors.

Why Act Now?

The Memorial Day trends aren't a one-off—they're a preview of 2025's patterns. With gasoline prices expected to stay between $3.25–$3.50/gallon, travel demand (up 3% in 2025) will continue to drive consumer spending. Meanwhile, the shift toward value-focused retail and regional energy efficiencies creates a clear path for investors:

1. Buy Walmart (WMT) for its unmatched scale in essential goods.
2. Take positions in refiners like Valero (VLO) to capitalize on low crude prices.
3. Lock in Home Depot (HD) as the go-to for post-Memorial Day home projects.

The market may be overlooking these companies' resilience, but the data is clear: These stocks are undervalued and primed to outperform as seasonal trends solidify.

Investors who act now can turn Memorial Day's insights into long-term gains. The question is: Will you be at the starting line—or the finish?

Andrew Ross Sorkin would never say it himself, but this is exactly the kind of analysis that turns data into dollars.