This year’s Valentine’s Day is set to be the most unusual in living memory. The meal for two, picked from a chronically overpriced set menu, in a packed restaurant is sadly restricted. The spa weekend away in a country hotel for the same price as a family week away on the Med are unavailable at present. With that mind, we sincerely send our love and hope to go back to being mercilessly fleeced again next year.
However, many industries will still rely on Valentine’s Day 2021 to bolster both profitability and sales. These include:
Valentine’s Day Cards
Nothing says “I love you” more than a pair of teddy bears or penguins holding hands on a folded red piece of card with a verse you would never be able to convey in person without laughing. But the traditional Valentine’s Card remains big business. Almost £1 billion worth of cards will be sent this year. That’s almost the same size as the entire UK fishing industry!
However, aside from Christmas, February 14th is card retailers’ most important period. A combination of supermarkets and the rise of the online, direct to consumer brands such as Funky Pigeon have seen growth in the retail sector plummet. Plimsoll’s latest assessment on the market shows growth of just 0.6%. Can they reconfigure their offering to compete in the increasingly remote selling world? With the Plimsoll Analysis showing average margins of just over 1%, the market has little choice but to adapt.
While card retailers continue to struggle, card publishers will be just as hard pressed, with the British public forecast to spend 35% less on this year’s Valentine’s Day as many couples are kept apart by lockdowns. The Plimsoll Analysis on the card publishing market shows growth already at 0% for the period leading up to the COVID-19 crisis. When the financial data that fully reflects this period is available, some in the market will have taken a major hit.
Chocolate
Aside from Easter and Christmas, Valentine’s Day is the biggest chocolate consumption period in the calendar. The recent changes in consumer trends have dented the profitability of many proponents. From fair-trade to no palm oil, vegan-friendly to low sugar content, the varied demands of the British consumer continue to fragment.
The latest Plimsoll Analysis on the UK chocolate market shows an industry with stable growth of 2.6%. In fact, 12 of the UK’s leading purveyors of chocolate have seen their sales grow by more than 10%. However, as the costs of cocoa have risen and trade barriers from Brexit to the virus have squeezed margins, profitability in the market has suffered. Average margins across the market have fallen to a 5 year low of just 1.9%.
Will couples increasingly glued to the sofa and binge-watching Netflix rather than going out on Valentine’s Day will 2021 bring a spike in demand for chocolate?
Flowers
Of all the industries banking on strong Valentine’s Day sales, floristry is the most desperate. With the increased prevalence of direct to consumer selling and cheap supermarket bouquets, the market is heading into the latest trading period in dire straits.
According to the new Plimsoll Analysis, retail florists are operating in a market struggling for both growth and profitability. The market has seen no growth in the latest trading period and margins are alarming shallow at just 0.6%. In fact, conditions are so poor, more than a quarter of companies were rated as danger in Plimsoll’s latest study.
In the wholesale market, conditions are only a little more stable. Plimsoll’s latest analysis of the wholesale market shows that while profit remain lowly at just 1%, growth is up at around 3% a year. With Brexit related tariffs of 8% and new customs inspections on flower imports due to hit shortly, the wholesale market has little room for manoeuvre but is in a far healthier position than the retail market.
Jewellery
Cliché or not, Valentine’s Day remains the most popular day for marriage proposals in the UK, followed only by Christmas. In fact, more than 100,000 questions will be popped on the most romantic day of the year.
With average spend on an engagement ring in the UK currently £573, that adds to more than £50m of revenue from one day alone. Clearly, romance is a lucrative business.
Plimsoll’s latest analysis confirms that the UK jewellery market continues to be in rude health. Growth continues apace at a healthy expansion rate of almost 5%. Profits have slipped to just under 2% in the latest trading period as precious metal prices spiked around the world, but margins were as high as 3% a couple of years ago.
The wholesale market is in far worse state. Growth is at 0% and profitability just over 1%. Clearly the direct-to-consumer model is staring to affect the wholesale market.
Adult Products
While the TV commercials might cause inter-generational awkwardness in many family homes, sex sells. In fact, the adult products market is selling more, and better, sex than ever before.
The industry has gone through a revolution over the past decade and a half. Cultural acceptability and an empowerment of female consumers started the revolution. An explosion of ecommerce removed the last remaining barrier to purchasing such “specialist” products. Whatever your desire this Valentine’s Day, there is a provider that can courier the requisite products to your door discreetly and embarrassment free. And it’s big business. The global market is expected to reach US$32 billion in 2021 and continues to grow in new market such as India and China. To put that into context, that is more than 50% larger than the global music industry.
Plimsoll’s latest analysis shows a market still growing rapidly at around 7% per annum. Average profit margins are also above 7% making the adult products market the place to be this Valentine’s Day. With almost 70% of merchandise coming from China, the market is the least likely to be affected by any Brexit disruption. It is also the market least likely to fall victim to changing consumer interest.
Plimsoll has produced individual studies on each of these key markets. In fact, we produce analytical, strategic analyses on more than 1600 UK industries. Each industry specific analysis is based on the latest possible data and is continuously updated to monitor the impact that the latest trading year has had on companies’ performance in your market.
Whether this Valentine’s Day finds you looking to woo a new trading partner, couple up with new acquisition opportunities, search for love in new markets or just interested in what makes your business better than its main rivals, a Plimsoll Analysis will give you an instant and easy to digest intelligence on all your options.
Visit www.plimsoll.co.uk or call 01642 626400 for more information today.