Consumers are set to spend a record amount of money to celebrate Valentine’s Day as people have expanded their gift-giving to friends and pets.
The 2019 holiday season generated strong sales as consumer confidence, a barometer of the U.S. economy, remained positive. Retail sales in 2019 increased by 4.1% during the same period in 2018 to $730.2 billion, according to the National Retail Federation, a Washington, D.C.-based trade organization. Online and other non-store sales rose by 14.6% compared with 2018 at $167.8 billion.
Shoppers said they plan to shell out an average $196.31, an increase of 21% compared with 2018. Total spending is estimated to be $27.4 billion, rising by 32%, according to the annual survey released by the National Retail Federation and Prosper Insights & Analytics.
“Valentine’s Day is a sentimental tradition, but gift-giving can be driven by the economy,” said Matthew Shay, CEO of the NRF, in a written statement.
The NRF said the larger increase in shopping is likely due to consumers buying gifts also for co-workers and pets and not just family members and friends.
The majority of people are buying their gifts at department stores, with 36% making purchases there while 32% spend money at discount and online stores, while specialty stores received 19%, florists at 17%, local small businesses at 15% and clothing stores and jewelry shops tied at 11%, the NRF said.
The Recipients of Gifts
Consumers said they plan to allocate 52% of Valentine spending to their significant other or spouse for an average of $101.21 compared to $93.24. People are spending more money on their co-workers, doubling to 7% from 3% compared with a decade ago. Pets are also getting a larger share of gifts as spending doubled from 3% to 6%. The survey showed that 27% of people are planning to buy their pets gifts.
“Just when you thought your budget was going to recover from the holiday spending spree, February rolls around and Valentine's Day smacks you in the face,” said Daren Blonski, managing principal of Sonoma Wealth Advisors. “Flowers, dinners, jewelry and romantic getaways abound on Valentine's Day. That doesn't tell the full story — after all not all of America is celebrating on its most beloved day of romance.”
Among adults in relationships, seven out of 10 plan to spend something on their partner to celebrate Valentine’s Day this year, averaging $152, according to a survey conducted by Bankrate, a New York-based financial data provider.
“As the saying goes with wedding vows, ‘for better and for worse’, so goes spending on relationships, including dating and going out for Valentine’s Day,” said Mark Hamrick, senior economic analyst for Bankrate. “Of course, retailers want consumers to spend as much as possible for the sake of their own revenues and profits.”
The Bankrate survey found that millennials (or those ages 24-39) had the most aggressive spending plans, topping the list at $208 in purchases. By contrast, those who have a longer record with these things, members of the Silent Generation, planned to spend an average of just $43.
While many people will be buying chocolate flowers and jewelry, another portion of the population will be hoping the day passes by without much fanfare, said Blonski.
Valentine's Day is a shot in the arm as shoppers are expected to spend $5.8 billion on jewelry alone.
“Valentine's Day has turned into more than a day to celebrate romantic love, but for many, it has become a day to celebrate those we love, including our kids, parents, siblings and pets,” he said. “Retailers expect $1.7 billion to be spent on pets. However and whomever you celebrate this Valentine's Day with, take time to show those you love that you love them.”
Individuals who are striving to have a long-term relationship or are married, sticking to a budget despite the fact that it is Valentine’s Day remains important.
“Spending on dining, entertaining and gifts needs to be viewed in the context of overall personal finance goals,” said Hamrick. “From a broader perspective for those who have a budget and are having success sticking to it, a little splurging for the sake of romance is harmless. That’s as long as it doesn’t happen very often.”
Going into debt to pay for gifts or a romantic getaway is not sustainable over the long-term.
“Alarm bells starting ringing for me when I hear about someone spending more than they can truly afford, particularly if they’re going into debt to pay for such expenses,” he said.