What will lower Valentine’s Day sales mean for retail?
Consumers in the U.S. are expected to spend less on Valentine’s Day this year, according to an annual survey released by the National Retail Federation (NRF) and Prosper Insights & Analytics.
The average consumer is expected to spend $136.57 this year, down from a record-high $146.84 in 2016. NRF sees the drop as part of a “market correction” after a decade of year-over-year increases for the holidays. In total, consumers in the U.S. are expected to spend $18.2 billion for the holiday versus $19.7 billion last year.
“Valentine’s Day continues to be a popular gift-giving occasion even if consumers are being more frugal this year,” said Matthew Shay, president and CEO of NRF, in a statement. “This is one day of the year when millions find a way to show their loved ones they care regardless of their budget. Consumers will find that retailers recognize that their customers are looking for the best deals and will offer good bargains just as they did during the holiday season.”
Candy (50 percent) and greeting cards (47 percent) will be the two most frequently given gifts for Valentine’s Day with an evening out (37 percent) and flowers (35 percent) also proving popular. Jewelry (19 percent), clothing 19 percent) and gift cards/certificates (16 percent) were also cited by the survey’s respondents.
As a reflection on an ongoing trend, 40 percent of consumers said they would like a gift of experience for the holiday, such as a ticket to an entertainment event, gym membership or outdoor activity. Even so, only 24 percent plan to give this type of gift to their Valentine.
As to where consumers plan to go shopping for Valentine’s Day gifts, the highest percentage said department stores (35 percent). Discount stores (32 percent), online (27 percent), specialty retail (18 percent), florists (18 percent) and local businesses (15 percent) were also named as shopping destinations.
NRF Valentine’s Day Spending Survey, conducted by Prosper Insights & Analytics, asked more than 7,500 consumers about their spending plans for the holiday. The survey has a margin of error of plus or minus 1.1 percentage points.
DISCUSSION QUESTIONS: What do you read into the projection of lower Valentine’s Day sales this year? Will expectations for a softer holiday lead to increased discounting?