Analyst cautious on Valentine’s Day spending forecast
By Canadian Pizza
By Canadian Pizza
February 14, 2012, Toronto – Last year, consumer spending in Canada, leading up to Valentine's Day, increased solidly from 2010 to 2011, and retailers are counting on similarly strong sales this year, too.
According to recent data from BMO, retail consumer spending in 2011 increased 9.25 per cent in the week leading up to Valentine's Day.
Feb. 14 is usually one of the biggest gift-giving days of the year, but retailers could be disappointed this year.
"On average, Canadian retail sales see a seasonal fall of 4.5 per cent in February from January; however, sales of jewellery and watches have actually surged by 30 per cent over the past 16 years in the month," said BMO economist Jennifer Lee.
The business of love can be pretty sweet for some retailers. The categories that experienced the largest year-over-year jump in sales from 2010 to 2011 were candy (15 per cent), flowers (15 per cent) and jewellery (12 per cent).
Despite the historical lift, Ms Lee is cautious about forecasting a continuation of that trend. "It's quite possible we'll see consumers pare back their Valentine's Day spending relative to prior years due to the slowdown in the Canadian job market and continued uncertainty in global markets," she said.
Restaurants certainly didn't feel the love last year and may feel jilted again this Valentine's Day. Last year, love birds seemed to opt for an intimate — and more affordable — dinner at home as there was a 4 per cent decrease in Valentine's Day-related restaurant spending last year.
Which love-struck Canadians go all out for their special Valentine? Saskatchewanians lead the rest of the country in spending (up 19.30 per cent) around Valentine's Day. Lagging behind them are people from British Columbia and Newfoundland, where Valentine's Day spending decreased from 2010 to 2011 (down 0.20 per cent and 0.62 per cent, respectively).