Although Americans are feeling the pinch in their wallets, they're not likely to scrimp on their loved-ones this Valentine's Day.
"What we find is that in times of economic uncertainty, there's more focus on the home, the hearth and family," says Scott Krugman, National Retail Federation spokesperson. "And with that, we found a trend for giving experiences, giving long-lasting memories."
Americans are starting to trade in traditional favorites like jewelry, flowers and candy for experiential gifts that range from the low to high-end, whether it's racecar driving, skydiving, wine tasting or dining.
According to the National Retail Federation's 2008 Valentine's Day Consumer Intentions and Actions Survey, conducted by BIGresearch, 48.2 percent of all consumers plan to celebrate Valentine's Day with a special night out, up nearly 3 percent from last year. Meanwhile, spending on jewelry slid 1.3 percent to 16.6 percent, spending on flowers dipped 0.8 percent to 35.9 percent, and spending on candy is down 0.7 percent at 47.7 percent.
The dining sector is one area that is likely to benefit from this trend. Valentine's Day is traditionally the second most popular day of the year to dine out, and the industry can expect a healthy turnout— over $1.5 billion.
The National Retail Federation expects overall consumer spending to be flat from last year at some $17 billion this Valentine’s Day, but industry experts say consumers continue to utilize restaurants on special occasions.
"Overall among all demographic groups, there is pretty much universal accord that consumers like to use Valentine's Day as a special occasion restaurant venue," says Hudson Riehle, V.P. of research and information services for the National Restaurant Association. "And, there really isn't any more special occasion than Valentine's Day."
People are trading down from casual dining concepts to fast food, says Steve West, a restaurant analyst at Stifel Nicolaus, but holidays like Valentine’s Day are relatively immune to a slowing economy.
"On celebratory type occasions like Valentine's Day and anniversaries they are typically still strong eating out days no matter what the economy is doing, because people still, you know, want to make themselves feel good," says West. "They'll save up and maybe not go out on a Friday night versus going out for the Valentine's Day."
The restaurant industry is so optimistic about consumer spending, that few are implementing promotional incentives: “We really don't see too much advertising and promoting just around Valentine's Day,” says West. “You know it's a pretty strong traffic day anyway, so they generally don't have to do anything to spur the traffic there.”
"As we say in the restaurant industry, it's always very important to see what consumers do and not what they say they're going to do," says Riehle. "Historically, when you look at sales over the past year, there's still been solid growth in the [restaurant] industry."
Meanwhile, high-end casual dining chains like Ruth’s Chris Steak House , The Cheesecake Factory, Maggiano's Little Italy, owned by Brinker International, McCormick and Schmick's Seafood Restaurant and Benihana are likely to fare well because they offer a little more than a traditional sit-down dinner, says West.
They are “more an experience than just a place to eat,” he says.