Some may write it off as a "manufactured" Hallmark holiday, but Valentine's Day takes a larger share of consumers' wallets than any other holiday season except Christmas and back-to-school. After several years of restrained spending, shoppers are ready to once again spread the love this year as business is expected to pick up across all categories.
Based on the National Retail Federation's (NRF) annual Valentine's Day survey, the average consumer will spend $116.21 this year on traditional Valentine's Day merchandise, up 12.8% from $103.00 in 2010. In addition, overall spending is expected to rise by about 11% to $15.7 billion as couples plan to spend more on each other and on their family, friends, co-workers and even their pets. Not surprisingly, men will spend nearly twice that of women, with the average man planning to shell out $158.71 compared to $75.79 for the average woman.
|Average Spend per Consumer||Total Spend (millions)|
|2011||$ 116.21||$ 15,708|
|2010||$ 103.00||$ 14,131|
|2009||$ 102.50||$ 14,668|
|2008||$ 122.98||$ 17,022|
|2007||$ 119.67||$ 16,905|
|2006||$ 100.89||$ 13,696|
|2005||$ 97.27||$ 13,190|
|2004||$ 99.24||$ 12,790|
|source: National Retail Federation's Valentine's Day Consumer Intentions and Actions Survey, conducted for the NRF by BIGresearch|
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Traditional gifts remain the most popular, with greeting cards, candy, and flowers most prevalent on Valentine's Day shopping lists. Discount stores will be the top destination this year, with 36.6% of consumers planning to purchase gifts there, followed by department stores (30.5%) and specialty (greeting card/gift, electronics) stores (19.4%).
"Having surpassed expectations during the holiday season, it seems consumers are not done spending on gifts, which bodes well for the economy," said NRF President and CEO Matthew Shay. "Jewelry, candy and apparel sales should provide a nice boost for retailers during the typically slower months of January and February."
While only 18.1% of shoppers plan on buying gifts online this year, Fiona Swerdlow, Head of Research at Shop.org, notes that the online Valentine's Day shopper expects to spend a combined net average of almost $200 on loved ones and friends for the occasion, or about two-thirds more than for consumers across all channels ($116.21).
In addition, online shoppers will spend more than their offline-only counterparts on other family members such as children and parents, as well as friends, co-workers and even pets. They will outspend offline-only consumers across every category, with plans to spend a net average of $114.25 on just their significant other or spouse, about 66% more than offline-only shoppers, and almost twice as much as offline-only shoppers on jewelry, budgeting a net average of over $50 for this gift item.
According to the eBlime Online Spending Index, a quarterly survey conducted by Javelin Strategy & Research, 32% of consumers plan to do their Valentine's Day shopping online this year, a 9% increase over last year. Also, 19% of consumers plan to spend more money this year on Valentine's Day gifts, a 7% increase over last year.
"There will be a lot of retail love this Valentine's season," says Marwan Forzley, President and CEO of eBillme. "Retailers are coming off one of the best holiday shopping seasons in several years and it looks like the spending will continue for another quarter. Our Index paints a very optimistic picture for the eCommerce sector with increases in shoppers and sales projected for the quarter,"
Market research firm IBISWorld is also optimistic, predicting Valentine's Day spending will rise 5.8% this year, led by year-over-year growth in flowers (+16.8%) and jewelry (+11.3%). The firm expects total sales to reach over $18.6 billion, compared to nearly $17.6 billion a year ago.
"Working consumers will not have the time to dine out nor find much of a reason to get dolled up on a Monday night," said IBISWorld retail industry analyst Nikoleta Panteva. "Nevertheless, growth is expected for each of the popular Valentine's Day categories this year, which is great news for retailers nationwide."
"Luxury spending is already on the rise, so it will come as no surprise that bracelets, earrings, necklaces and rings will be the go-to gift choice for many Americans," said Panteva. "This year, IBISWorld expects jewelry to make up 7.8% of all Valentine's Day sales, making its way back to pre-recessionary levels."
|Category||2011 (millions)||2010 (millions)||YoY % Chg|
|Dining Out||$ 8,831.20||$ 8,508.30||3.8%|
|Candy||$ 2,593.20||$ 2,466.80||5.1%|
|Romantic Getaway||$ 2,164.30||$ 2,047.00||5.7%|
|Flowers||$ 1,582.50||$ 1,355.20||16.8%|
|Jewelry||$ 1,456.30||$ 1,308.70||11.3%|
|Clothing & Lingerie||$ 1,165.30||$ 1,126.30||3.4%|
|Greeting Cards||$ 822.80||$ 784.30||4.9%|
|Total||$ 18,615.60||$ 17,597.10||5.8%|
|source: IBISWorld 2011 Valentine's Day spending forecast|
According to the Society of American Florists (SAF), Valentine's Day is the No. 1 holiday for florists, capturing 36% of holiday transactions and 40% of dollar volume (fresh flower purchases only). The group estimates 198 million roses were produced for the holiday in 2010. Florists will be feeling the love once again this year – 56.2% of male respondents to the NRF survey indicated they will be giving flowers to loved ones, and IBISWorld forecasts consumers will spend over $1.58 Billion on flowers this Valentine's Day.
Greeting cards will be the gift of choice among women this year according to the NRF survey, with 58.6% of female consumers saying they will give someone a card this year. According to the Greeting Card Association (GCA), Valentine's Day is the second most popular card-sending occasion in the U.S. after Christmas, with an estimated 190 million valentine cards exchanged every year. When children's classroom-exchange valentines are included, the GCA estimates that approximately 1 billion valentines will be opened in the U.S. in 2011.
And what would Valentine's Day be without candy? The National Confectioners Association (NCA) says nearly $1 billion in candy is sold for the holiday (at food, drug and mass merchants excluding Walmart), trailing only Halloween, Christmas, and Easter spending. Meanwhile, Nielsen estimates that consumers buy more than 58 million pounds of chocolate candy during Valentine's Week, ringing up $345 million in sales and accounting for 5.1% of total annual sales.
After a strong Holiday season and surprisingly robust performance in January for most retailers, it's clear that consumers are feeling more confident and willing to spend. Based on a recent survey from PriceGrabber, 52% of Valentine's Day shoppers indicate that the economy will not have any effect on their purchasing decisions this Valentine's Day, and 22% of consumers plan to spend more than last year.
Though February is typically a low-volume month for most retailers, we expect Valentine's Day to drive strong growth without the heavy promotional activity of years past, and should provide a nice kick-start to the new fiscal year.