Australian’s love for Valentine’s Day looks set to continue this year, with consumers expected to spend around $791.4 million on gifts and experiences for February 14.
The forecast spend, from research company IBISWorld, is up slightly, 1.8%, on 2013. IBISWorld expects the average consumer to spend $86 on their partner, with luxurious gifts likely to override generic confectionery and flowers.
IBISWorld general manager Australia Karen Dobie said “premium items are at the top of the agenda this year”.
“And for those unable to splurge on a romantic getaway or dinner at a hatted restaurant, there will be opportunities to go the extra mile by purchasing premium chocolates and a dozen red roses rather than a mixed bouquet from the local servo.”
Restaurants are set to be the big winners this year, with Australians expected to spend $42.3 million eating out on the day of love, which is up 24.4% from $34 million in 2013.
Jewellery retailers should also do well, with spending on jewellery and accessories forecast to grow by 9.2% to $40.5 million, up from $37.1 million in 2013.
IBISWorld senior industry analyst Ryan Lin told SmartCompany this is not necessarily spent on luxe diamonds and pearls, but premium accessories and fashionable items.
“Jewellery is increasingly an alternative to generic Valentine’s Day gift giving of chocolates and flowers,” he says.
IBISWorld predicts that couples will spend $441.6 million on romantic getaways this Valentine’s Day, up 0.9% on last year’s figure of $437.7 million.
Lin says this will be helped by Valentine’s Day falling on a Friday this year, which he says is good news for the domestic travel sector as people could take long weekends.
He says country or coastal retreats should do well, however, international trips should decline due to the recent drop in the Australian dollar.
IBISWorld forecasts a very small growth in spend on clothing and lingerie this year, up 2.2% to $68.2 million.
Lin says lingerie and clothing are losing momentum as gifts, likely due to the combination of high cost and challenge of getting a gift at the right size and style.
The popularity of Valentine’s Day staple gift chocolate is in decline, with it expected to drop 7.1% this year to $90.9 million. However, IBISWorld forecasts premium chocolates such as fair trade and organic, rather than generic brands, should still sell well.
“Chocolate will never go away, it has been intrinsic to the growth of Valentine’s Day in Australia for years,” he says.
“However couples can perceive chocolate as a ‘go-to’ gift when all else fails, which could be part of its decline,” he says.
Flowers will still be popular, with Valentine’s Day generating 10% of annual sales for florists. This year IBISWorld forecasts spend on flowers to rise by 3.4% to $93.3 million.
Lin expects premium floral arrangements and gift baskets will be the key choice for consumers, accompanied by a hand-written card.