Valentine’s Day Spending – The Beginnings of a Retail Love Story?
When it comes to the calendar of retail “holidays,” Valentine’s Day closely follows the all-important holiday shopping season and offers yet another opportunity to gauge the status (or should I say, heartbeat) of the American consumer. This year, Americans are showing a willingness to splurge on their loved ones—a willingness that may provide a helpful boost to the retail industry beyond Cupid’s big day. According to the NRF’s 2012 Valentine’s Day Consumer Intentions and Actions survey, total Valentine’s Day spending is expected to reach $17.6 billion, an all-time high in the 10 years since the survey’s debut. As consumers buy their gifts and book their restaurant reservations, the average shopper is expected to spend $126.03, an 8.5 percent increase over last year’s average of $116.21.
What are starry-eyed consumers buying this Valentine’s Day? The NRF’s survey found that shoppers will spend the most on jewelry this year, with sales expected to reach $4.1 billion. Moreover, 19 percent of the survey’s participants plan to purchase jewelry, an increase from 17.3 percent last year. That’s the highest number of jewelry shoppers in the survey’s history. Most shoppers (52%) plan to purchase gift cards, followed by candy (50.5%) and flowers (36%).
While Americans may simply be feeling more generous this year, there’s likely an explanation behind these positive trends. U.S. consumer spending was disappointingly flat in December, but other leading indicators of consumer well-being leave room for optimism. Wage increases in December 2011 led to a 0.5 percent increase in personal income, and wages continued to inch up in January. Last month also saw the addition of 243,000 net new jobs, resulting in an unemployment rate of 8.3 percent—the lowest since February 2009.
Overall, wage growth and an improved employment outlook bode well for the average U.S. consumer. These trends are confidence boosters, encouraging consumers to visit stores and increase their discretionary spending. If wages and employment continue to rise, retailers will benefit from newly emboldened shoppers. Given the remarkably positive expectations for Valentine’s Day, the economy-boosting cycle may have already begun.
What are your predictions for consumer spending on Valentine’s Day and beyond?