U.S. consumers are expected to dole out an average of $146.84 this Valentine’s Day for a combined spend of more than $19.7 billion, according to the National Retail Federation survey conducted by Prosper Insights and Analytics.
Spending estimates are up 3% year-over-year and represent a survey high as one in two consumers plan to celebrate the holiday, the trade group said Thursday (Feb. 4).
“As the first major consumer holiday of 2016, Valentine’s Day could provide a positive boost in spending our economy needs,” said NRF President and CEO Matthew Shay. “Low gas prices and guaranteed promotions from retailers large and small should help consumers as they look for the perfect gift for their friends and family. Looking ahead, we’re optimistic consumers are in a good place when it comes to spending on discretionary items like gifts.”
Department Stores like Dillard’s and discounters like Wal-Mart are poised to glean the majority of overall sales with more than 32% of respondents saying that is where they will purchase their Valentine’s Day gifts. The fastest growing shopping mode is online purchases as 27% of respondents said that is how they will shop for their Valentine gifts this year.
Online shopping has doubled in the past five years. Electronics stores will draw in 19% of consumers ahead of this Valentine’s Day. Small businesses are expected to glean about 15% of consumers’ shopping for Valentine’s Day, while 11% said they will visit a jewelry store.
Economists said retailers of all sizes are eager to see more foot-traffic in early 2016 after lackluster sales have been reported across the entire retail spectrum from the recent Christmas holiday season. Unseasonably warm weather put a dent in winter apparel sales and overall online purchases took sales away from brick-and-mortar retailers forced to slash prices and erode overall margins.
One in two consumers plan to spend roughly $26 on candy, which will equate to more than $1.76 billion in additional confection sales over this holiday period. Roughly 40% of consumers plan to enjoy a night out at a restaurant and/or a movie or show of some sort, which should comprise entertainment spending of $4.5 billion, the highest since the federation began tracking this data in 2010.
More than 36% of consumers plan to purchase flowers for their Valentine sweetheart spending $40 on average for combined floral sales of $1.98 billion. One in five will give jewelry costing an average of $166 or $4.45 billion in the aggregate. Nearly everyone celebrating the holiday will buy a greeting card or two for the holiday for a total aggregate spend of $1.14 billion, according to the survey. Clothing and gift cards are also popular Valentine’s Day purchases expected to ring up $2.02 billion and $1.68 billion, respectively.
Spending on husbands, wives and partners will account for the lion’s share of the revenue gain or $12 billion, according to the survey projections. The average spend between spouses and significant others is expected to be $89.86, up from $87.94 last year. Additionally, consumers will spend an average of $27.79 on other family members like children and parents, $7.08 on children’s classmates and teachers and $5.83 on co-workers. Even the family pet is expected to be treated, accounting for $681 million in additional spending this year.
“With the winter holidays behind us, consumers may have a little more room in their budget to indulge on gifts for their loved ones,” said Prosper’s Principal Analyst Pam Goodfellow. “This year we expect consumers will look for unique and creative gifts, including that extra special ‘experience’ that can be shared any time throughout the year. Even those on a tight budget can find affordable ways to create a special moment with each other even past Valentine’s Day.”
This year, the survey asked consumers about their hope to receive and plans to give a gift of experience such as a spa day or concert tickets. One in four said they planned to give a gift of experience, while 38% said they would love to receive one.