Understanding The Retail 4-5-4 Calendar

Many retailers follow a calendar known as a 4-5-4 calendar. This calendar, originally introduced in the 1930’s and began to be used commonly in the 1940’s, is beneficial for many reasons. Among the most important is that it provides a more consistent month flow versus the standard calendar, where weekends and days of each month will vary each year. The 4-5-4 calendar, however, provides the same number of weekends for comparable months, therefore allowing a more accurate report of sales. Because weekends tend to be heavier in sales for retailers than weekdays, making sure there is some routine to the annual reporting of sales – including what day of the week the sale is made – is extremely important.

The calendar known as 4-5-4 divides the year into months of 4 weeks, then 5 weeks, then 4 weeks and so forth. Beginning on Sundays and ending on Saturdays, it also ensures holidays are lined up and like days, such as a particular Wednesday, are lined up so that sales reporting can be done accurately.

As effective and beneficial as this calendar is, there is one problem that it brings to the table. It only covers 364 days. The extra one day that isn’t covered on the calendar is easily managed, though, by proper bookkeeping completed by each unique retailer. During Leap Year, though, retailers may opt to add another week to the calendar – though some retailers ignore this altogether. When a 53rd week is added, you simply push your weeks back by one to compare to the previous year. Essentially this would mean you would ignore the first week of the year. It also gives retailers and vendors a great reason to get excited – more time to meet annual sales goals!

In addition to allowing sales to be reported more accurately, there are two more valuable reasons to use the 4-5-4 calendar. The first is payroll. This calendar can help guide you in your payroll decisions and help manage your accounting. The second additional reason is inventory control. With a balanced calendar, taking inventory and tracking inventory can be done more accurately when completed routinely.  

While it’s common for large, corporate stores to use this calendar, not all independent retailers have introduced this to their stores. Most retail software systems have this calendar integrated into their systems, however some small business owners still track sales the old fashioned way (pen and paper or their own excel spreadsheet). Certainly there is not a right way to do this – only you can determine that for your store – but there are easier ways to manage your business. This calendar is definitely one of them. A great tool for retailers, if you aren’t following the 4-5-4 calendar already, you should consider how it may be helpful for you.