Consumers are expected to have big hearts and even bigger shopping bags this Valentine’s Day. IBISWorld estimates holiday spending to grow 1.7% to $20.1 billion in 2018, topping its historical record. Driven by high levels of per capita disposable income, consumers are more likely to splurge a little more on gifts for their special someone. The average shopper is expected to spend $151.98 on holiday indulgences. According to the National Retail Federation (NRF), a larger share of the US adult population will celebrate Valentine’s Day this year, with an expected 54.7% participation rate, up from 53.9% in 2017.
Labor of Love
Sales of jewelry and candy are anticipated to experience the largest holiday boons in 2018, with spending on these traditional Valentine’s Day gifts expected to grow 5.4% and 3.1%, respectively. According to the NRF, more consumers will buy candy this year than any other gift, with 55.0% of total holiday participants planning to spoil the people they love with something sweet. High demand for holiday treats is set to benefit operators in the Candy Production industry and the Chocolate Stores industry, with IBISWorld expecting these industries to achieve 0.9% and 1.0% respective revenue gains in 2018.
Gifts of experience will also be a bright spot this Valentine’s Day, with the category slated to account for more than one-quarter of total holiday spending. IBISWorld projects that these experiential presents, such as concert tickets and massages, will grow 3.1% this year to total $5.1 billion. According to the NRF, 42.3% of consumers say that they would love to receive a gift of experience, though only 23.7% say they plan to give this type of present. Nevertheless, the high price point and popularity of these kinds of gifts will help boost revenue for providers of romantic experiences this year; for example, IBISWorld estimates that revenue for the Massage Services industry will rise 5.5% for in 2018.
Change of Heart
Cupid’s arrow will not hit all spending categories this Valentine’s Day, with consumer spending on greeting cards and an evening out expected to take slight tumbles this year. With the holiday falling in the middle of the week, fewer consumers will have the time to celebrate with a date night, contributing to a 0.3% contraction in spending on a celebratory night out. Fewer big dates this Valentine’s Day will contribute to an expected 0.8% decline in revenue for buffet restaurants in 2018, as well as slow 1.1% growth in demand for premium steak restaurants for the year.
Demand for greeting cards is slated to decline more rapidly than any other gift category, with revenue falling an expected 4.0% in 2018 to $710.2 million. Along with advances in technology, consumers are increasingly opting to send holiday messages via text and e-card, rather than mailing classic greeting cards. According to Hallmark, Valentine’s Day is the second-largest card-giving holiday of the year, with 144.0 million cards exchanged on the day. Due to this year’s expected decline in Valentine’s Day greeting card purchases, IBISWorld expects that demand for the Greeting Cards and Other Publishing industry will contract 3.2% for the year.
Edited by Stephanie Conte. Designed by Rebecca Simon.