Retailers Feel The Love This Valentine’s Day


IBISWorld Forecasts Sweet Sales This Holiday, Especially For Restaurants

By IBISWorld Senior Analyst Nikoleta Panteva

Following a better-than-expected holiday season, retailers can expect a strong Valentine’s Day this year. Industry research firm IBISWorld forecasts total sales for the holiday to grow 5.0 percent from 2011 figures (in constant 2012 dollars).  Consumers put off romantic dinners during the recession, opting for smaller tokens of appreciation like flowers and candy instead.  In 2012, however, IBISWorld anticipates a return to dining out and romantic getaways .   

Restaurants are likely to see the biggest boost this year with sales slated to increase by 6.1 percent to an estimated $9.5 billion.  Consumers are anticipated to return to dining out, which will be led by restaurants’ initiatives (including special courses for the holiday and prix fixe arrangements).

Travel is also expected to rebound this year, with consumers spending 5.4 percent more this year than last year. Because Valentine’s Day is on a Tuesday in 2012, hotel rates are not expected to spike drastically during the weekends preceding or following the holiday. As such, more consumers will be willing to spend a weekend away .

Following last year’s 9.0 percent increase in sales, jewelry is expected to record another solid year of growth in 2012. IBISWorld projects that the amount of money spent on jewelry will increase by 5.2 percent in 2012 to $1.6 billion. Retailers are offering lower-priced options especially for the holiday while the luxury market will continue growing as it has since late 2010.

Other categories are not expected to perform as well, although each is likely to experience higher sales than last year. Candy sales are forecast to grow by 3.6 percent to $2.7 billion. Consumers are seeking out exotic flavors and combinations, which tend to be pricier than the traditional gummy and chocolate treats the holiday is known for. Additionally, the rising price of cocoa is being passed on to consumers in the form of higher prices, which also ultimately pushes up sales.

Flowers , a staple gift of the holiday, are expected to increase by 3.3 percent this year. Consumers are most likely to order their bouquets and arrangements through online retailers, which allow them to browse and compare prices easily. Price competition, however, limits revenue growth for retailers because they collect lower prices. Clothing and lingerie sales are also expected to underperform total Valentine’s Day sales. While consumers are likely to spend more on these items than they did last year, they are still more likely to shop for traditional Valentine’s Day items like candy and flowers. Greeting cards , which have shown lackluster performance for the past five years, are expected to continue their slow growth in 2012, increasing by only 1.6 percent. 

To download full research reports for the industries discussed in this article, click on the report titles below.

Greeting Cards , Candy Production , Jewelry Stores , Florists , Single Location Full-Service Restaurants , Lingerie, Swimwear & Bridal Stores , Hotels & Motels    

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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide.

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Valentine's Day sales are expected to grow 5.0% in 2012
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