Following a strong holiday spending season, Valentine’s Day forecasts by the National Retail Federation promised that cupid would deliver strong sales as well.
Surveys indicated that for the 55 percent of the population who celebrate Valentine’s Day, spending in 2020 was due to be up an average of 21 percent to $196.31 over 2019’s record $161.96.
Fifty-two percent of the spending is for spouses and significant others, a smaller share than in the past, but shoppers have broadened the range and amounts they spend for those in other categories, including pets!
Video Spotlight: Valentine’s Day spending trends
This post is based on the National Retail Federation article, Confident consumers and broader buying lead to record Valentine’s Day spending plans, by J. Craig Shearman, January 30, 2020, and the YouTube video, Valentine’s Day spending trends, by 41 Action News, February 14, 2020. Image source: picalotta/Getty Images
1. What does the Retail Trade Association claim are the variables that affect its forecasts for Valentine’s spending? On what will the money be spent?
Guidance: The same strong employment figures and higher incomes that brought a great holiday season for retailers in December 2019, should also buoy purchases for Valentine’s Day 2020. Total spending is forecast to increase 32 percent over last year’s Valentine’s Day, for a total of $27.4 billion versus the record of $20.7 billion set in 2019.
With more people earning more money, spending on items like jewelry, clothing, candy, and cards is expected to be strong, as is spending to celebrate with restaurant meals or other experience-related gifts such as tickets or spa packages. A record 27 percent of those surveyed plan to buy gifts for their beloved pets as well.
2. What type of pattern can be seen in the graphs shown in the article for historical total and average planned spending over the last ten years?
Guidance: Both graphs demonstrate increasing trend, a gradual upward movement over time. The most recent growth, from 2017 onwards, most likely reflects the strong economic growth in employment and wages that took place during the same periods of time.
3. What types of businesses stand to gain the most from the forecasted increases in sales, and what does this mean in terms of capacity planning?
Guidance: Forecasters suggest that 36 percent of sales, the largest chunk, will take place in department stores, with 32 percent of shoppers going to discounters or online stores. Other sales will take place at specialty stores, florists, and local small clothing and jewelry stores. Survey respondents may have been able to select more than one shopping destination, as the results totaled more than 100 percent.
For the stores and restaurants that will experience increased demand, plenty of inventory must be available to sell, and service capacity, such as wait staff and cooks need to be planned accordingly. Constraints, such as number of tables, will ultimately limit how many guests can be served, but having plenty of employees and food on hand can help maximize the use of facilities.