Valentine’s Day is coming and consumers are tipped to spend almost half a billion dollars, despite the worst cost-of-living crisis in a generation.
The Australian Retailers Association (ARA) predicts $485 million will be spent by romantics on February 14, up 16.9 per cent on last year – with the average Australian predicted to spend about $118 this year.
ARA chief Paul Zahra predicts the splurge will be driven by “freedom spending”, because this is the first Valentine’s Day since the start of COVID-19 in 2020 that will be free from pandemic restrictions.
“For couples who have begun a relationship in the last
three years – this will be the first opportunity for them to celebrate Valentine’s Day without limitations,” Mr Zahra said on Thursday.
But not all retailers are so optimistic; many of those The New Daily spoke to said that it’s not shaping up to be a very big celebration as the cost of living hits.
“It has been really slow this year,” said Chantelle Kechebashian, from the online gift store Send Boxi.
Natalie Jarvis, the owner of a small retail shop called Electric Confetti in Victoria, said she wasn’t expecting “much at all” for Valentine’s Day, even though “it used to be quite popular”.
Retailers are split on whether the cost-of-living crisis will spoil Valentine’s Day this year. Photo: East End Flower Market
Consumers do appear to be feeling the pinch, with ABS retail sales data for December showing a marked slowdown in activity as rising interest rates and inflation bite into budgets.
A survey of 1000 Australians published earlier this week by e-commerce platform Moonpig found 39 per cent didn’t plan on buying anything at all for Valentine’s Day, while one in three plan on booking a date.
Almost half said the cost of living was the key reason they would spend less.
“[The] cost of living [is] killing the romance,” a retailer said.
Consumers looking for value
Kelly Jamieson, managing director at online gift basket retailer Edible Blooms, said Australians are “looking for value” this Valentine’s Day, amid unprecedented budget pressures.
The business owner isn’t expecting a record trade on February 14, but is nevertheless optimistic it will be stronger than last year.
“Last year was a Monday, which isn’t the greatest day for gift delivery companies [after the weekend],” Ms Jamieson told The New Daily.
“On a Tuesday we’re expecting a busier day than last year.
“Consumers are looking for value … when you’re buying something special you’re making sure you’re getting value for money.”
Ms Jamieson said more workers are also back in the office this year, which is a good sign for Valentine’s Day spending because people often make purchases after seeing what their colleagues buy their partners.
“People in the office is a big part of it, [colleagues] matching other people’s deliveries,” she said.
Sophia Czarkowski, founder of accessories retailer Art By Sophia, said she had prepared a Valentine’s Day range, but expects slow sales.
“I’m expecting sales to be down this Valentine’s Day as the cost-of-living expenses increase,” she said.
“Next Tuesday’s interest rate announcement will cause further pressures and dampen spending.”