RAPAPORT... Expect U.S. consumers to spend about $1.3 billion on jewelry for Valentine's Day this year, which is 4.6 percent lower than what was spent for February 14, 2009, according to IBISWorld. Jewelry, candy, and flowers registered declines in the group's annual Valentine's Day spending forecast, but spending gains were expected for clothing, greeting cards, a romantic getaway, and dining out. Total spending would amount to about $17.6 billion, and this forecast was 3.3 percent higher than 2009.
“Because Valentine’s Day lands on a Sunday, restaurants are likely to gain traffic throughout the entire weekend,” said Toon van Beeck, senior analyst with IBISWorld. “Furthermore, because President’s Day is on the following Monday, many consumers will be able to travel over the three-day weekend, further boosting restaurant sales.”
IBISWorld concluded that men typically buy candies, flowers and jewelry during the work week, but since the holiday falls on a weekend they will not feel as much pressure to purchase by Valentine’s Day. As a result, they are not as likely to take the time on the weekend to shop, opting instead for a romantic dinner out.
“Many retailers will see Valentine’s Day as an opportunity to kick start the new year, but the unemployment rate and continued uncertainty of the economic recovery will hamper growth and expansion,” explained van Beeck. “This combined with the fact that the holiday is a discretionary purchase, IBISWorld expects customers to remain on the shopping sidelines for the second consecutive year.”
In a separate report provided by the National Retail Federation (NRF), couples will spend an average of $63.34 on gifts for their significant other or spouse, compared with $67.22 in 2009. The average person will shell out $103 on traditional Valentine’s Day merchandise this year, similar to what was spent in 2009. NRF predicts spending for Valentine's Day would reach $14.1 billion.
“While some may view Valentine’s Day as cliché, many people still look forward to giving significant others, friends, family and even pets something special,” said Tracy Mullin, president of NRF. “Rather than not give anything at all, consumers will instead focus on small, thoughtful gifts for the people who mean the most to them this year.”
NRF determined that "personal and practical" gifts would resonate as gifting included sweaters, winter accessories and other clothing options in place of jewelry or an evening out. NRF predicted that 15.5 percent of those who buy Valentine's Day gifts would select jewelry, which is down one-half of a percentage point from 2009.
“The economy has forced consumers to rethink their gift giving practices,” said Phil Rist, executive vice president of strategic initiatives at BIGresearch. “Personal and unique gifts will speak volumes this Valentine's Day as consumers dig deep into their hearts and not their wallets."