Jan 31 2019
IBISWorld expects total Valentine's spending to increase by 3.1% from 2018, amounting to £1.4 billion.
Purses are anticipated to loosen over the Valentine’s period, despite weak consumer confidence due to economic uncertainty. IBISWorld expects revenue associated with the day to increase by 3.1% from 2018, reaching £1.4 billion. Consumers will continue prioritising creating memories through experiences and outings over traditional presents. The majority of consumer spending this Valentine’s Day is expected to go towards hotels and restaurants, although growth in spending on dining out is projected to slow compared with the previous year.
The majority of spending at restaurants is forecast to be carried out by couples, treating their partners to a special night out, and by singles going on first dates. Consumers are also expected to treat their partners to a romantic getaway this Valentine’s Day. However, as disposable incomes remain constrained and more consumers gravitate towards the staycation trend, breaks are likely to be shorter and more local, encouraging expenditure at hotels. With Valentine’s Day falling close to half term, prices are expected to be high. Spending on romantic getaways is forecast to increase by 7.2% from 2018.
Although expenditure on experiences is expected to be at the forefront of consumer spending this Valentine’s Day, many consumers will be buying more conventional Valentine’s gifts. According to IBISWorld industry analyst, Raajan Rai, “consumers are expected to put more thought behind their purchases, placing greater emphasis on creativity and sentiment”. Retailers are anticipated to offer a wider variety of personalised products, allowing consumers to buy gifts with character for their partners.
"Retailers are anticipated to offer a wider variety of personalised products"
Spending on sweet treats like cupcakes and luxury chocolates is expected to remain popular this Valentine’s Day. However, rising health concerns and subdued discretionary spending may limit growth within this category. Expenditure on jewellery is forecast to decline by 4.5% this year, with the majority of spending on jewellery done by high-income individuals that are relatively unaffected by recent economic uncertainty in the United Kingdom. Consumers are likely to complement smaller gifts with a Valentine’s Day card. The revenue generated by greeting cards this year is projected to rise by 3.3%, in line with flowers and sweets, which are projected to rise by 4% and 4.9% respectively. Flowers are typically a less expensive gift option than jewellery, and those with tighter budgets due to economic uncertainty are expected to focus their spending on such gifts.
Increasing access to the internet has affected consumer spending patterns over the Valentine’s period. As online shopping becomes increasingly easy and convenient, a growing number of consumers are buying their gifts online rather than in-store, from online retailers such as Amazon. This is likely to boost spending from time-constrained consumers or late shoppers. However, online shopping also allows consumers to compare prices and find the cheapest deals available.
IBISWorld industry reports used in this press release:
G47.110 - Supermarkets in the UK
G47.710 – Clothing Retailing in the UK
G47.770 – Jewellery and Watch Stores in the UK
I55.100 - Hotels in the UK
I56.101 – Full-service Restaurants in the UK
UK0.010 – Florists in the UK
About IBISWorld Ltd.
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