The Economics of Valentine's Day: How Love & Money Intertwine

You think that Valentine’s Day doesn’t have a big impact on the economy? You would be surprised by how much economic stimulus this one holiday has on a local and national scale

Valentine's Day is a holiday that is steeped in tradition and sentimentality, but it also has a significant economic impact. 

From the flowers and chocolates to the jewelry and dinner reservations, the holiday generates billions of dollars in revenue for businesses both large and small. 

In this post, we'll explore the economics of Valentine's Day and how love and money intertwine on this special day.

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How much do people spend on Valentines Day?

Valentine's Day is big business, according to the National Retail Federation that publishes an annual survey, carried out by Prosper Insights & Analytics to learn how the consumer expects to spend their money on this celebration.

The findings in this survey expect consumers to spend an average of 185.81 in gifts and activities for 2024. That's a total of $25.8 billion in spending on the holiday. 

Over half (53%) of the surveyed plan on celebrating Valentine's this year, while this indicator hiked to 62% for consumers age 25-34.

From a $25.8 B total in spending, for the celebrations, surveyed people planned to use $14.2 B in gifts.

The NRF's report mentioned that last year consumers celebrated all special relationships in their lives (including pets and co-workers), while this year they expect them to priorituze gifts for their partners.

“With consumers prioritizing their spouse or significant other this year, retailers expect to see a shift in spending for certain gifting categories” said Matthew Shay NRF President and CEO.

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How Valentine’s Day Compares to Other U.S. Holidays

Because of its spending relevance, this date is considered a major holiday for the retail and service industry and it is comparable to other holidays in terms of economic impact, along with Christmas, Thanksgiving, Easter, and Halloween, that also generate a significant revenue. 

These holidays also drive consumer spending on gifts, decorations, and travel.

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What is Spent on Valentine’s Day?

We all know that candy and flowers are a bçig part of Valentine’s Day.

However, it’s a good idea to take a closer look at the numbers shown in the 2024's NRF survey to see where the economic impact is felt the most. 

Most popular gifts

• Candy 57%
• Greeting cards 40%
• Flowers 39%
• An evening out 32%
• Jewelery 22%
• Clothing 21%
• Gift card / certificate 19%

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Brands That See the Biggest Valentine’s Day Boost

Jewelry brands such as Tiffany & Co. and Cartier typically see a boost in sales, as do luxury, flower and chocolate companies like 1-800-Flowers and Godiva.

Additionally, brands that sell romantic gifts such as stuffed animals, candles, and lingerie, like Build-A-Bear, Yankee Candle and Victoria's Secret, also see a boost in sales.

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Ultimately, brands that offer a romantic, luxurious or indulgent experience are likely to see an uptick in business during Valentine's Day.

The Demographic Breakdown of Valentine’s Day Spending

Valentine's Day spending varies by demographics, with some groups spending more than others. According to surveys:

• Men tend to spend more on Valentine's Day gifts than women.
• Younger people also tend to spend more than older people. 
• People with higher incomes are more likely to spend more on Valentine's Day gifts, dining and vacations. 

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• Single people and people in relationships also tend to spend differently on Valentine's Day, with single people spending more on themselves and people in relationships spending more on their partners. 
• Furthermore, people living in urban areas tend to spend more on Valentine's Day than people living in rural areas. 

Overall, Valentine's Day spending is influenced by a combination of demographic factors such as age, gender, income, relationship status and location.

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How do people spend Valentine's Day?

A continued interest that the NRF's Valentine's Day have shown are gifts of experience with about one third of consumers plan to give an experience as a gift this year.

Prosper Insights & Analytics Executive Vice President of Strategy Phil Rist said that "While shoppers may be spending the most on jewelery, the most popular gifts are the classics (candy and greeting cards)."

Retailers are the biggest beneficiaries of Valentine's Day spending.

Flowers, chocolates, and jewelry are the most popular gifts purchased for the holiday. Jewelry stores, florists, and candy shops all see a significant boost in sales during the weeks leading up to Valentine's Day. 

 

 

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What are the retail trends for Valentine's Day 2024?

Trhough the years, how people buy their gifts for this particular holiday have shifted.

Gift delivery (mostly for flowers, chocolates and other decorative items) have become tradition, however, this gifts are now available through online shoping.

According to the NRF's 2024 survey, 40% of the consumers plan to shop online for their gifts, up from 35% from the 2023 survey.

However, since gifts like jewelery and clothing are among the most gifted for the holiday, a third (33%) of the surveyed plan to buy in department stores, as well as 31% of them on discount stores and 17% with florists.

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Overall, Valentine's Day plays a big role in the ecommerce industry, with many retailers experiencing a significant boost in sales and revenue during the holiday season.

Restaurants As a Top Date Night Destination

Restaurants also see a significant boost in revenue on Valentine's Day. Many couples choose to celebrate the holiday by going out for a romantic dinner. 

Restaurants often modify their menus for Valentine's Day by offering special, romantic dishes and drinks, often featuring ingredients like chocolate, strawberries, and champagne. 

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They also create an ambiance that is cozy, intimate, and festive, sometimes offering live music and special decor. The prices may be slightly higher to reflect the festive nature of the occasion. The aim is to create a memorable dining experience for couples celebrating their love.

 

What businesses do well on Valentine's Day?

Valentine's Day is also an important day for small businesses. Many small florists, jewelry stores, and chocolatiers see a significant boost in sales on Valentine's Day. 

Local restaurants also benefit from the holiday, as many couples choose to dine out at a smaller, more intimate establishment rather than a chain restaurant.

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How is inflation affecting Valentine's day?

It is important to consider the natural rising cost of goods and services and its effects on Valentine’s Day spending.

As prices for goods and services increase, the cost of traditional Valentine's Day gifts such as flowers, chocolates, and jewelry may become prohibitively expensive for some people. 

Additionally, the cost of dining out or going on a romantic vacation may also become too expensive for many people to afford. 

This can lead to a decrease in consumer spending on Valentine's Day, which can have a negative impact on businesses that rely on the holiday for a significant portion of their revenue. 

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Overall, elevated inflation levels can make it more difficult for people to celebrate Valentine's Day in the way they would like to.

 

Why are some people against Valentine's Day?

Although some of the traditions date to times prior to the ancient greeks, some argue that the celebrations are no more than marketing stunts.

And although its economic impact may seem as a good argument as evidence of the critics, the survey also revealed that among the 47% that had no plans to celebrate, 29% of them recognized that they were planning to mark the occasion in some way.

 

Love and Money on Valentine’s Day

Valentine's Day is a holiday that is steeped in tradition and sentimentality, but it also has a significant economic impact. 

From the flowers and chocolates to the jewelry and dinner reservations, the holiday generates billions of dollars in revenue for businesses both large and small. 

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While small businesses face challenges through the year, how they seize the economic impact of Valentine's Day  can make a difference to keep the lights on for the rest of the year.

Whether you're buying a gift for your loved one or planning a special evening out, know that your spending is helping to support local businesses and keep the economy moving forward.