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Extra day, extra pay: Businesses consider the impact of leap year

Extra day, extra pay: Businesses consider the impact of leap year
Extra day, extra pay: Businesses consider the impact of leap year

In the delivery sector, where most drivers work per hour or day, casual wages mean that there would be an extra day of pay every four years.

This leap year, the extra day falls on Thursday, which means two things: an extra day to deliver orders and pay more salaries.

It’s undoubtedly a headache for financial officers who must ensure the books balance during this extra day added to our calendars every four years.

While it may seem tricky initially, it could be an opportunity to generate a full day of extra business, which the CFO will widely welcome. 

How does leap year impact my business?

The Wallstreet Journal quotes banking firm UMB Financial, projecting that some staff’s salary and benefit expenses will increase with the leap-year day. On the other hand, businesses with a substantial number of hourly-paid delivery drivers could see a notable increase in their costs in February compared to the same month in 2023. 

Speaking to WSJ, Steve Hills from the advisory firm Stout Risius Ross warns that businesses must book the correct depreciation and amortization for 29 days instead of the usual 28 days of the month. 

Companies taking advantage through marketing

Many businesses see leap day as a perfect opportunity to increase sales volume. The Tennessean reports on marketing deals set out for February 29. Krispy Kreme is running special discounts for a dozen donuts on this day – while others have catchy games like “extra day, extra codes” at some restaurants. 

Krispy Kreme is running a special for those who have their birthday on the leap day, with a dozen free donuts upon giving proof. 

The marketing team at American chain restaurant Chipotle has come up with a challenge for customers to uncover 29 hidden keywords on its posts on Instagram. The winners will receive… free extra guacamole.

These marketing initiatives are seen worldwide, which could be a significant revenue booster for small businesses.  

ALSO READ: The psychology of Promo FOMO and how to get it right

Walmart expecting increases

While releasing its fourth-quarter results last week, projecting what can be expected for the next quarter, Walmart took into account the extra day.

For the current quarter, Walmart anticipates a consolidated sales spike between 4% and 5% from the same period in 2023. It estimates that the leap year will add about 100 basis points of benefits to its books. 

In the last leap year, Walmart experienced a 1% net sales growth in that quarter. 

Taking a leap of faith

As we embrace this bonus day that the leap year brings, businesses across many sectors face challenges and opportunities. As demonstrated by Walmart, strategies to benefit from this extra day can yield positive impacts on sales that far outweigh the additional cost to the company. 

With the help of strategic marketing, small businesses have a unique opportunity to capitalize on this event and turn it into a leap toward success.

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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