Shoppers are expected to spend quite a bit on Valentine’s Day 2013, buying for significant others, friends, family and coworkers. Merchants around the country will be overwhelmed with orders for perennial Valentine’s Day favorites like chocolates and roses.
But are these items really going to be good buys? Should you spend on flowers or candy, or go large on jewelry and buy nothing else, or skip all the frills and opt for a nice night out? Since we don’t know your significant other’s tastes, we’ll show you what purchases make the most sense for your budget. The rest of the prioritizing is up to you.
Inflation Means Prices Are Up, But Can We Get More Specific?
To get a better idea of what items are good buys this season and what items are going to be pricey, we compared popular Valentine’s Day items from last year and this year. We compared the annual percent change in the Consumer Price Index (CPI) from December 2011 to December 2012 to the annual percent change in selected expenditure categories during the same time frame.
The CPI all items index rose 1.7% during 2012. Item categories that fell below the 1.7% rise for the same time period are relatively affordable in real terms, even though they nominally cost a bit more than last year, whereas items in expenditure categories that rose more than 1.7% are now more expensive than average.
We found that the inflation of the jewelry and hotels categories was dramatically below the 1.7% rate of inflation, while the rising price levels of watches and alcohol outside the home were markedly more than the all items rate of inflation.
Good News First: Now’s The Year to Buy Jewelry
Men, take notice. According to the Bureau of Labor Statistics (BLS), the agency that produces the CPI, jewelry prices fell 2.9% during the calendar year of 2012, even though total inflation increased 1.7%. This means that jewelry prices aren’t just rising a bit below inflation – they’re actually decreasing.
You’ll pay less for the average piece of jewelry this Valentine’s Day as opposed to Valentine’s Day 2012. This is quite a reversal from last year, too, as jewelry prices rose 7.8% in 2011, far outpacing the total CPI all items 2011 index of 3.0%.
These BLS stats seem to be in line with some qualitative findings as well. For Valentine’s Day 2012, the online jeweler Blue Nile was selling a Hand-Engraved Heart Locket in Sterling Silver for $94. This year, the same locket at the jeweler is going for $79.
If you’ve been putting off buying a nice piece of silver for the significant other for a while, now is the time to pull the trigger. Get it done, guys, and girls, free feel to remind your man about this great government data if he drags his feet this Valentine’s Day.
Find Time for a Quick Getaway with Your Partner
The unromantic sounding expenditure category of “Other lodging away from home including hotels and motels” decreased 0.2% in 2012. Like with jewelry, that means those overnight stay costs didn’t just rise at a level below inflation, but actually fell in price. A hotel or motel stay is a nice option for Valentine’s Day, then, and you’ll be paying less for it than you would have for last year’s cupid day.
Get something special for the overnighter as well. The expenditure category of “Women’s underwear, nightwear, sportswear and accessories,” an admittedly large and varied category, fell 1.0% in 2012, making a new sleepwear set for your Valentine’s Day date a nice affordable buying option for shoppers.
Unfortunately, the BLS data doesn’t get more granular than lumping sportswear and underwear together, but use this fall of 1.0% as an excuse to buy some nice new lingerie for the woman in your life.
Avoid the temptation to travel far or attend a show. The category of airline fare rose 2.1% in 2012, more than inflation, and the category of “Admission to movies, theaters, and concerts” rose 3.7% in 2012 too. Skip those Valentine’s Day movies.
Open the Bottle at Home, Not at the Restaurant
The BLS category of “Alcoholic beverages at home” rose 1.1% in 2012 and the subcategory “Wine at home” rose only 0.8%, less than half the total all item inflation index.
Compare this to the cost increase in the same categories away from home – as “Alcoholic beverages away from home” rose 3.0% and “Wine away from home” rose 3.2% – and it’s clear that sharing an intimate glass or two or five in the comfort of your own home won’t hurt your Valentine’s Day budget nearly as much as drinking out on the town.
Flowers Are Affordable Too
The costs of “Indoor Plants and Flowers” decreased 0.5% in 2012, signaling that flower prices have dipped slightly since last Valentine’s Day.
Now, any guy knows that nice flowers aren’t exactly affordable – you’ll be paying over $50 easy for any batch of nice red roses – but it’s good to know that prices haven’t skyrocketed since you last purchased flowers on Valentine’s Day.
Candy Prices Stay Constant with Inflation
The prices of “Candy and chewing gum” have increased 1.5% from December 2011 to December 2012. This is in line with the 1.7% overall rate of inflation for the same time period.
And yes, we know that no one (or not many?) people buy chewing gum for their sweethearts for Valentine’s Day. So to disentangle the BLS category a bit, we took a look at an 8 oz. assorted chocolate heart box from See’s Candies, one of the chocolate shop’s most popular Valentine’s Day items.
We see that the year-over-year price increases of this chocolate box hold steady at a constant 30 – 35 cent increase per year. The 35 cent increase in the box in 2013 over the 2012 $11.45 price is more than the total “Candy and chewing gum” category change of 1.5%. This inflation isn’t nearly as high as the number on the next category, though, and we’re also guessing you’ll be spending less money on candy than on the next item if you purchase it.
Expect to Pay Quite a Bit for Watches
Watches are pricey this year. The watch expenditure category of the Consumer Price Index rose 4.6% in 2012, dramatically more than the 1.7% total increase in the all items index. This means that watches for Valentine’s Day might give you a bit of a sticker shock if you haven’t checked in on watch prices since Valentine’s of 2012.
There are certainly some limitations to using the BLS’s Consumer Price Index. The data is not as granular as we’d like, as evidenced by the “candy and chewing gum” expenditure category. The CPI also has some degree of difficulty in accounting for quality changes, although the “hedonic quality adjustment” is one modeling strategy the BLS uses to account for quality.
Also, because these expenditure categories are so broad and encapsulate so much, you’re still likely able to find a good deal or two on some of the biggest risers, like watches, with smart Internet snooping. Check out online coupon codes and rewards mall discounts for starters.