As disposable income surpasses prerecession levels for the first time, IBISWorld anticipates total revenue for Valentine’s Day to be up 3.7% from 2013, a stronger growth from a year ago. While sales of all relevant categories are expected to grow, expensive gifts like jewelry, romantic getaways and premium products will be the winners in 2014. Moreover, sales of premium chocolate and gift cards are anticipated to drive the growth of lower-ticket categories. Consequently, the average expenditure for this Valentine’s Day is expected to increase slightly from last year’s $134.28 to $135.10.
While the percent of married couples in the United States has declined over the past decade, a lower percentage of married people does not necessarily dampen Valentine’s Day sales. In fact, according to a study conducted by Big Research, unmarried couples and singles spend $20.00 to $30.00 more on average for their significant other than married couples. With the aim of impressing the person they are pursuing, singles have a greater incentive to spend lavishly on their dates. Additionally, many consumers purchase small-ticket items for friends, family and coworkers on this holiday. As such, growth in the number of single Americans will help drive revenue from the sale of flowers, candy, clothing and dining out.
With cupid’s arrow falling on a Friday this year, marketers are expected to cash in on Valentine’s Day celebrations extending throughout the long weekend. More couples will plan weekend getaways, taking advantage of President’s Day taking place on the following Monday. As such, romantic getaways is expected to be the winner this year, outperforming total Valentine’s Day sales. Also, benefiting from improved income levels and a positive economic environment, more consumers will plan to dine out with their loved ones on the 14th, helping boost restaurant revenue by 4.1%.
Armed with thicker wallets, both married and unmarried couples are anticipated to trade up to premium items, whether it be a box of handmade chocolate or designer jewelry. In particular, jewelry sales will receive a substantial lift as more Americans choose to wed this year when compared with last year, according to research firm Jewelry Industry Research Institute. Moreover, improving income and lower unemployment levels are allowing more Americans to settle down and tie the knot. With an estimated 10.0% of proposals taking place on Valentine’s Day annually (according to the US Census), jewelry sales are forecast to grow a robust 4.5%.
Growth of more affordable gifts
Sales of lower-ticket gifts including candy, greeting cards and flowers are also expected to grow in 2014, albeit at a slower rate than total Valentine’s Day sales. Growth for candy and greetings cards is anticipated to be driven by inflationary prices and the growing popularity of premium brands rather than higher volume sales. Candy and card marketers will benefit from Valentine’s Day taking place on a weekday, as students and workers will give chocolate and sugar confectionery to their classmates and coworkers. While premium candy brands’ share of total candy sales remains small, the growing popularity of organic, handmade and other, more expensive varieties of chocolate are projected to boost revenue from this product category.
The growth of flower and clothing sales is anticipated to be facilitated by the convenience of ecommerce websites, which allows consumers to gift loved ones all across the country. As over half of consumers plan on making Valentine’s Day purchases either online or on their mobile phones, it will be especially important for marketers to offer holiday specials on their websites this year. However, fierce price competition that ecommerce retailers engage in will dampen gains for these categories.