Aussies loosen the purse strings for Valentine’s love

AUSTRALIANS are beginning to loosen the purse strings and it’s all in the name of love.

As consumers pay down debt and squirrel away record amounts of money, it seems they are also prepared to splash out for someone special.

New research shows Valentine’s Day spending is predicted to increase by almost five per cent as couples outlay the best part of $1 billion in the lead up to February 14.

Business information analyst IBISWorld expects Australian lovebirds will spend $908.7 million, up 4.8 per cent on 2011.

IBISWorld general manager Karen Dobie said despite weak retail activity, Australians were now willing to make luxury purchases after scrimping and saving last Valentine’s Day.

“This year we are expecting a more lavish display of affection through a splurge on something sparkly, a romantic meal out or the sharing of a boutique box of chocolates,” Ms Dobie said.

She said Australia’s domestic tourism operators would be the biggest winners as couples forked out $422.2 million on romantic mini-breaks.

It also comes at a tough time for the industry as the high Australian dollar prompts people to holiday overseas.

Dining out and weekend breaks would increase by almost six per cent on 2011, with jewellery sales set to soar nine per cent, IBISWorld says.

Ms Dobie said the popularity of cooking shows was raising the awareness of fine dining and driving demand for high-class restaurant bookings.

“This is especially true on special occasions such as Valentine’s Day,” she said.

While classic romantic gifts like chocolates and flowers were expected to remain popular, the appeal of lingerie was beginning to wane.

Spending on intimate apparel gifts is tipped to dip 0.6 per cent, while chocolate sales accelerate almost five per cent.

IBISWorld analyst Paul McMillan said the average Australian would spend $40 this Valentine’s Day, up from $38 a year ago, as people began feeling confident of dipping into their savings.

“People are still quite willing to splash out on special things occasionally and I think Valentine’s Day is a big part of that,” Mr McMillan said.

He said consumers would spend money on birthdays and anniversaries but they were unlikely to return to the days of buying lots of cheap goods on credit.