Despite UK consumers thinking the occasion has become too commercial, they are set to spend £987million on gifts and cards for Valentine’s Day this year.
Regardless of weakening consumer confidence, Valentine’s Day falling on a work day (Tuesday) rather than at the weekend as it did last year, and consumers thinking the event has become too commercial, GlobalData forecasts consumers will spend £987 million on gifts and cards for their loved ones this year.
While there has been a slight increase in the total spend (+0.7%), price inflation in cards and flowers is being offset by the high level of competition in the market. Supermarkets are not only competing against each other for a share of spending, they also have to contend with increasing participation in events such as Valentine’s Day from general merchandisers such as B&M and Poundland.
Anish Dosani, Retail Analyst for GlobalData, remarks: “Partners and spouses are going to benefit this year from increased competition in the market, but for retailers, though there is a slight increase in overall spending, any increase is being shared across far more participants as retailers take advantage of the occasion and attempt to gain a bigger share of spending.”
Consumers hold negative perceptions of Valentine’s Day, despite willingness to spend
Many consumers still have a negative perception of the occasion. More than four-fifths (81.2%) of consumers surveyed by GlobalData in February 2016 felt that Valentine’s Day has become too commercial, while more than half (52.3%) felt that it is a waste of money. This is an advantage for the discounters and value retailers, as consumers can treat their partners but still get good value for money.
“While we expect there to be an increase in consumer spending on Valentine’s Day this year, the more general lack of interest in the occasion means that retailers are going to have to work even harder to drive sales and win this spend,” Dosani adds.
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