Armed with strong financial positions consumers are expected to dole out $27.4 billion on goods and services for Valentine’s Day this year. That’s up 32% from a year ago and would be a record spend for the sixth-largest holiday in the U.S., according to National Retail Federation (NRF).
“Valentine’s Day is a sentimental tradition, but gift-giving can be driven by the economy,” NRF President and CEO Matthew Shay said. “Consumers spent freely during the 2019 winter holidays and they appear ready to do the same in the new year. The same strong employment numbers and higher wages that boosted holiday sales should make it easier to spend a little extra to say ‘I love you’ this year and to spread the gift-giving beyond just your significant other.”
Shay said those celebrating the holiday plan to spend an average $196.31, up 21% over last year’s previous record of $161.96. Over the past 10 years, spending has increased from an average of $102.50 per person, up 91%. The unusually large increase in average spending appears to be due to strong consumer finances and a continued trend of consumers buying more gifts, cards, candy and flowers for friends, family, co-workers and pets. The increase in total spending comes as the number of people celebrating Valentine’s Day returned to 55%, about average for the past decade, after a dip to 51% last year.
The biggest share of Valentine’s Day spending still goes to spouses and significant others at 52% of the total, or an average $101.21 this year, up from $93.24 in 2019. But their share of the spending is down from 61% a decade ago. The share spent on most other recipients is up over the past decade, with the amount spent on co-workers, for example, more than doubling to 7% of the total from 3%. The share for pets doubled to 6% from 3% in the same period.
Consumers said they plan to spend an average of $30.19 on family members other than spouses, up from $29.87 last year. Spending on friends is forecast at $14.69, up from $9.68 last year. Families said they will spend an average of $14.45 on children’s classmates and teachers, which is nearly double the amount last year. Pets and co-workers are also among those getting Valentine’s Day gifts in 2020 at average rates of $12.21 and $10.60, respectively. NRF said 29% plan to buy Valentine’s Day for their pets which is the highest figure in the history of the survey. Total spending on pets is expected to be $1.7 billion this year.
“We’ve always heard of puppy love, but pets are definitely seeing a larger share of Valentine’s Day spending,” Prosper Insights Executive Vice President of Strategy Phil Rist said. “Husbands and wives don’t need to be worried if their spouses are buying a Valentine’s Day gift for someone else – most likely it’s greeting cards for their children’s class at school, flowers for a family member or maybe a treat for the family dog.”
The biggest spenders are expected to be those between 35 and 44 years old. This group plans to spend $358.78 saying they have lots of folks to treat this year. Consumers between 25 and 34 years old also plan to spend big at $307.51 on average. Younger consumers (ages 18-24) plan to spend $109.31 on average, according to NRF. Men also outspend women historically and this year should be no different with men planning to dole out $291 versus the $106.22 spent by women.
The jewelry category will be a big winner this Valentine’s Day with total spending expected at $5.8 billion. One in five plans to make a jewelry purchase this year. Another $4.3 billion will be spent on an evening out, dining or some form of entertainment. More than one-third of consumers will spend money on an outing.
One in five said they will spend money on clothing totaling $2.9 billion. The most popular gift given by 52% of consumers is candy and that will total $2.4 billion. Flowers are a popular gift with 37% of consumers planning to spend in this category. Floral spending is expected to top $2.3 billion. Other categories poised to do well include gift cards ($2 billion) and greeting cards ($1.3 billion), with 43% of consumers buying Valentine cards. The survey also asked consumers what gifts they most hoped to receive and 41% said gifts of experience was the overall favorite.
Katherine Cullen, senior director for consumer insights at NRF, said the strong economy is a big reason for the uptick in participation this year.
“Wage growth and a low rate of joblessness are feeding back into consumers’ pocketbooks, boding well for consumer spending. During recessionary periods, for example, American consumers aren’t as willing to spend as much,” Cullen said. “When people feel good about their individual situation and their own paychecks, it’s easier for them to spend a little bit more on something for a loved one, such as a night out or a box of chocolate for friends.”
Howard Hurst of Tipton & Hurst Florist in central Arkansas said planning for Valentine’s Day goes on year-round. His business dates to 1886, which makes it the second-oldest specialty retail establishment in the state. Hurst said being adaptable to new trends, consumer spending habits and social media platforms are critical for survival in today’s competitive business environment.
He said Valentine’s Day is by far the No. 1 flower holiday of the year – about 10 times the volume of a normal week. He said Valentine’s Day volume is also more than double that of Mother’s Day for his business. Hurst said given the vast competition his slimmest margins are also on Valentine’s Day.
Hurst said aside from his five brick-and-mortar locations in the Little Rock, Conway metro area and Pine Bluff, his firm also has an online presence, and more than 50% of his orders are made online by all age demographics, including younger, more tech-savvy generations.
“As a wholesaler, we are able to source flowers and plants from around the world, with a focus on locally grown and made varieties. We have long-standing relationships with growers, both domestically and internationally, and buy directly from them. During Valentine’s Day, roses are by far our most popular, with many stems coming from Ecuador, Colombia, California or the Netherlands. Whether tulips, orchids or tropical blooms, our flowers come straight from the growers to our stores in specially-refrigerated trucks to ensure the highest-quality products possible,” Hurst said.
Floral spending is expected to top $2.3 billion this year in the U.S., and Hurst said red roses are the most popular bouquet because they are synonymous with Valentine’s Day. He said tulips are timeless and a great alternative to roses. He said the cost for a dozen red roses can vary depending on the size of roses and whether they are arranged in a bouquet or wrapped and sold at retail. He said at his retail stores a dozen roses retail for $34.95, but the larger, premium long-stem rose arrangement is $80.
“We have bouquets for every price point,” he said. “We’ve kept the prices consistent for the past several years. We strive to ensure our customers receive the best product at the most reasonable price, even when the cost of the flowers doubles and triples due to supply and demand on Valentine’s Day.”