Photo: JAmie Street on Unsplash.com.
While the luxury markets began 2023 on a cautious note, in the United States at least retailers remained optimistic about what traditionally is one of their key sales opportunities, Valentine’s Day. According to according to the annual survey released by the National Retail Federation and Prosper Insights & Analytics, American onsumers are expected to spend $25.9 billion on Valentine’s Day this year, up from $23.9 billion in 2022.
That was in contrast to what has been evident over the past several weeks in the diamond market. The RapNet Diamond Index for 1-carat diamonds fell by 0.9 percentin January, and according to the Rapaport news service, trading was slow amid lingering economic uncertainty, which was evident in weaker consumer sentiment and mixed results for November and December reported by U.S. jewelers.
Although high-end luxury jewelers appeared to have done well, with Richemont’s main jewelry brands – Cartier, Van Cleef & Arpels, and Buccellati — seeing a fourth-quarter revenue rise of 11 percent and sales at LVMH’s jewelry and watch division, which includes Bulgari and Tiffany & Co., rising by 7 percent, American independents were down about 9 percent in the fourth quarter, according to the Edge Retail Academy. Mastercard SpendingPulse reported a 5.4 percent decline in November and December sales.
Retailers held back from replenishing the holiday inventory, Rapaport reported, with the number of diamonds on RapNet as of February 1 being 20 percent higher than a year earlier.
$5.5 BILLION IN JEWELRY SALES PREDICTED
Americans will spend more than $5.5 billion on jewelry ahead and February 16, predicted the NRF survey.
“Valentine’s Day is a special occasion to shop for the people we care most about,” NRF President and CEO Matthew Shay said. “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.”
According to the NRF survey, some 52 percent of consumers plan to celebrate and will spend an average of $192.80. This is up from $175.41 in 2022, and the second-highest figure since NRF and Prosper started tracking Valentine’s Day spending in 2004.
Those aged 35 to 44 plan to outspend other age groups, allocating $335.71 on average for gifts and other Valentine’s Day items, approximately $142.91 more than the average consumer celebrating the holiday, NRF reported.
Similar to recent years, the top shopping destination to purchase Valentine’s Day gifts is online, with 35 percent of survey respondents saying that they will follow that route, closely followed by department stores, at 34 percent, discount stores, and 31 percent and specialty stores at 18 percent.
NRF conducted the survey of 7,616 U.S. adult consumers from January 3 through January 11. The poll has a margin of error of plus or minus 1.1 percentage points.
DECLARING LOVE WORTH THE DEBT
A separate survey of 2,000 American adult consumers conducted by LendingTree survey indicated that those in a relationship will spend roughly $187 on gifts for partners. This is in spite of the tougher economic climate, with sinking deeper debt just to afford day-to-day expenses.
A WalletHub survey showed that 27 percent of couples said they will need to rely on credit cards to cover Valentine’s Day costs , but lmost 1 in 5 Americans think a Valentine’s Day gift is worth the credit card debt.
“It’s always important to be careful about what you are spending on but especially when interest rates are as high as they’ve ever been,” said LendingTree’s chief credit analyst Matt Schulz, quoted by CNBC. “The good news with Valentine’s Day is that there are so many creative things you can do that don’t cost you any money that can be a really big hit.”