Cupid Is Not Fretting Over Higher Prices For Valentine’s Day

While consumers feel the continued squeeze of inflationary pricing, the outlook for Valentine’s Day spending seems optimistic. Consumers are expected to spend $25.9 billion on Valentine’s Day in 2023, up 8% over last year. The National Retail Federation and Prosper Insights & Analytics revealed that spending this year will be one of the highest numbers on record for the February holiday. “This year, as consumers embrace spending on friends and loved ones, retailers are ready to help customers celebrate Valentine’s Day with memorable gifts at affordable prices,” stated NRF President and CEO Matthew Shay.

The NRF survey of 7,616 U.S. adult consumers also showed that even among those who don’t plan to celebrate Valentine’s Day, 28% will still mark the occasion somehow. They may treat themselves to something special, plan a get-together or evening out with single friends and family members.

Budget-conscious consumers

Consumers pulled back their spending in November and December, and this may be what is expected for 2023 as the economic uncertainty continues. Rising interest rates and widely reported layoffs across the U.S. in some sectors, such as tech, will make consumers more cautious about spending. However, since the pandemic, consumers have wanted to have more life experiences and spend more time with loved ones, giving way to what looks like a strong Valentine’s Day for retailers.

Most U.S. consumers plan to buy gifts for someone this Valentine’s day, with only 13% of those surveyed saying they do not intend to purchase items for the holiday. Sezzle, a buy now pay later (BNPL) plan used by shoppers, surveyed its users, encompassing 966 respondents. Another key takeaway from the survey was that 57% of respondents stated that ongoing inflationary pricing would impact their gifting choices for Valentine’s Day. “Inflationary pricing is a debilitating factor that affects all shoppers – sub-prime to prime – and as shoppers use more cautionary spending practices, we expect to see a continuation of the upward trend of BNPL,” stated Charlie Youakim, CEO and co-founder of Sezzle.

Uncertainty plagues consumers

Economic uncertainty will continue to weigh heavily on consumers’ minds going into February. The Federal Reserve recently announced its eighth increase of interest rates since March 2022 by a quarter percentage point in its effort to cool down rising prices. “Interest-free financing and the opportunity to build credit is a combination that shoppers seek during times of economic uncertainty. Sezzle and the BNPL sector work to alleviate the pains of inflation,” said Youakim. While the job market remains strong, consumers are still apprehensive about what the future holds in 2023, but data suggests that Valentine’s Day will be a most loved holiday.