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COLUMBUS, Ohio - February retail sales may increase slightly as households begin to receive larger-than-expected tax refunds, but Valentine's Day may not provide much of a boost, at least on higher-ticket items, according to the latest Retail Forward Monthly Shopper Update Survey. In addition, any improvement in spending will likely evolve slowly, dampened by persisting job and income worries among low to middle-income households, according to Retail Forward, a Columbus, Ohio-based consulting firm.
The Retail Forward survey finds that compared with a year ago, more than twice as many households plan to spend less on Valentine's Day gifts than plan to spend more. Only a small proportion of gift-givers plan to buy relatively expensive items such as fine jewelry, consumer electronics or apparel.
That could be good news for supermarkets that carry an attractive selection of the more affordable, traditional Valentine's Day gifts. Survey respondents picked greeting cards (67 percent) and candy (40 percent) as the top items they plan to purchase. The average amount of planned spending (among purchasers) is $11 for cards and $16 for candy. Eighteen percent plan to buy flowers, another perennial favorite, for an average purchase price of $28.
The expected path of near-term spending reported by households participating in the survey held steady compared with Retail Forward's December survey. Despite the one-time benefit of winter weather on January retail sales, the results suggest that households should remain tentative in their spending plans until they become convinced that the economic recovery is for real. Spending among the lowest income households (under $25,000) remains most vulnerable.
Survey results also indicate that spending by the large population of low to middle-income households continues to be hampered by meager job creation and weak income growth, while upper-income households ($100,000 and over) are benefiting from a rebounding stock market.
The Retail Forward Monthly Shopper Update Survey is conducted each month with a sample of 4,000 U.S. primary household shoppers. The survey is conducted online among a nationally representative sample of households.