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Of love and money: the business of Valentine’s day

Heart hands for Valentine's Day

Like many holidays and celebrations, Saint Valentine’s day owes its origins to our pagan ancestors. Though the ‘Valentine's feast day’ is another example of the church hijacking an ancient Roman pagan festival (in this case, Lupercalia - which took place in February and was all about fertility rituals and purity) it may have been the poet Geoffrey Chaucer in the Middle Ages who first linked St Valentine with romantic love.

Since then, countless couples (and probably an even greater number of ‘singletons’) have asked the vexed question: why do we need a set day to express or confess our love? Is Valentine's Day a representation of our romanticism, or a one-day proof of a lack thereof?

Of course, there are those who point out that the whole thing is mostly just to prop up the greeting card industry and independent florists. However, surveys have shown that up to 50% of women would apparently ditch their partners if he or she didn’t get them a Valentine day’s present which, though perhaps extreme, serves to emphasise the importance that the date now holds for the emotional wellbeing of many relationships and economic survival of many more restaurants and retailers.

Now heavily commercialised and laden with expectation, it wasn’t that long ago that Valentine’s Day meant buying a card for your loved one and perhaps a bunch of flowers or a box of chocolates. Not anymore.

Exactly how much British consumers spend on Valentine’s Day varies depending on which survey you believe. However, the days of a simple card and a box of chocolates being sufficient on the 14 February seem to be long gone. On average, men spent £40 on their partner on Valentine’s Day, whereas women spent an average of £24.

With spending approaching £Ibn this year – for many retailers ‘Valentines’ is the first opportunity to kick-start business after weeks of post-Christmas frugality. At a time when the High Street is struggling, Valentine’s Day provides a vital peak in the retailing calendar; recent research has shown that footfall in many city centres increases by about 20% on 14 February, interestingly reaching a peak at around lunchtime – suggesting that quite a few might be using their dinner break to make good their romantic oversights.

With fresh flowers reportedly making up 36% of transactions and 40% of overall spend, it is hugely important to florists – although the traditional independent florists have been hit by competition from the supermarkets as well as a desire amongst consumers for more imaginative gifts. Sales of jewellery, spa weekends, city breaks and even cars all show peaks in February - and help to boost the growth in annual spending which otherwise takes a dip in January.

Furthermore, competition from the online companies is growing; in less than 10 years internet-based businesses such as Amazon have captured about one third of the Valentine’s day market which, in turn is expanding the market and stretching the concept of romance. However, interestingly, web traffic across various dating sites dips significantly on 14 February but then picks up to reach a peak a few days later.

But is Valentine’s Day an economic stimulus? Many pundits argue that it is – although not all would agree. Using the concept of ‘opportunity cost’, an economist might argue that all the money spent on Valentine’s Day could just as easily have been spent on something else or saved (indeed sales in other less romantic sectors such as footware and clothing tend to go down in February). When money is saved (say economists) it is loaned out to others for productive uses like expanding a factory or building a machine.

However, to use that argument might explain why economists often find themselves pondering these conundrums alone by themselves on Valentine’s night.

Like many festivals, rituals and events in the twenty first century, Valentine’s Day has lost much of its original symbolism and meaning. Perhaps too many people spend money to please or appease, when their partners would simply like to have more time, thought and appreciation from them. However, the personal touch, the little thoughtful gesture, is often more a sign of true love and commitment than extravagant, OTT romantic gestures. The right way to think about Valentine’s Day is the opportunity to find a gift that matters for the person you care about.

Richard West, senior lecturer at Westminster Business School