No matter how you feel about the holiday, there is no doubt that there are benefits to celebrating it. Whether or not you are making purchases for loved ones, the money spent helps the economy to grow. Here is the impact of buying that bouquet of flowers or box of chocolates this Valentine’s Day.
holidays benefit the economy.
o comprehend why holidays contribute to the economy, it’s crucial to grasp the concept of gross domestic product (GDP). GDP represents the total value of all goods and services produced within a country during a specific period. A growing GDP signifies economic expansion. Notably, 68% of the United States’ GDP stems from consumer spending.
As a major holiday approaches, people make purchases they wouldn’t otherwise. These surges in sales have a positive impact on the economy, benefiting businesses and boosting the country’s GDP. Khawaja Mamun, an associate professor of business economics at Sacred Heart University, sheds light on how this spending cycle contributes to economic growth.
“As we spend more, many people benefit and earn money,” he said. “As businesses and workers earn more money, they tend to spend that money. If they don’t spend, then those without the income are also not able to spend.”
How does Valentine’s Day Impact the Economy?
Valentine’s Day holds a unique place because it motivates most consumers to make purchases. Whether you’re in a romantic relationship or not, there’s likely someone you’re buying a gift for—be it friends, coworkers, children, or relatives.
According to the National Retail Federation (NRF), 62% of consumers aged 25-34 plan to celebrate Valentine’s Day in 2024. The projected total spending for this occasion is $25.8 billion, with a specific projection of $14.2 billion for spending on significant others. Despite the NRF’s prediction that consumers will buy less for non-romantic relationships this year, the gap indicates that people still express their affection through gifts for friends and family members.
The most purchased Valentine’s Day gifts
Each year, the NRF takes an annual Valentine’s Day Spending Survey to see what consumers plan to purchase for their loved ones. Here are the results for the 2024 survey:
- Candy (57%)
- Greeting cards (40%)
- Flowers (39%)
- An evening out (32%)
- Jewelry (22%)
- Clothing (21%)
- Gift card/gift certificate (19%)
Consumers are expected to spend $185.81 each on average, which is $8 more than the average for the past five years. Forty percent do their shopping online, 33% at department stores, 31% at discount stores and 17% at florists.
How does Valentine’s Day benefit small businesses?
While you can likely find similar products online or in large department stores, there are distinct advantages to shopping at small businesses. When you choose to shop locally, you contribute to creating more jobs, bolstering the local economy, and supporting shop owners within your community. Additionally, small businesses often offer unique and personalized products that you won’t find in a standard department store. For instance, they specialize in customizable gifts, which are perfect for occasions like Valentine’s Day.
However, it’s essential to recognize that love cannot be quantified solely through material gifts. Remember, it’s not the price tag that truly matters; it’s the genuine affection and connection that count.
