Everyone knows 14 February means Valentine's Day – a time to celebrate love and friendship.
Several areas of the economy benefit from increased consumer activity around Valentine’s Day. The hospitality industry gets a major boost, in particular, with businesses like restaurants and hotels experiencing a notable spike in demand. Valentine's Day also increases spending on transport as a result, as people visit their loved ones or decide to take a short holiday.
It means Valentine’s Day is a significant driver of economic activity and an important date in the diary for businesses and chartered accountants. Finance professionals must ensure the uptick in trading is both anticipated in advance and processed promptly to ensure 14 February runs smoothly.
Reasons to spend
We spend a lot of money on Valentine’s Day in the UK. One piece of research says that about 40m Britons take part, sending 25m cards and splashing out £1.37bn on the luxury, food and leisure sectors in 2022. This is up from £926m the previous year. Elsewhere, an estimated $25.9bn is expected to be spent in the US in 2023.
When it comes to gifts, the most popular – voted for by 33% of people in one UK survey – is chocolates and confectionary. This is followed by flowers (31%). Another survey finds that 32% of people plan to go out for a meal on Valentine’s Day, generating approximately £319m in revenue.
The tourism sector benefits, too. Before the pandemic, £267m was spent by Brits on weekend breaks around Valentine’s Day in 2019. This understandably dropped off in 2020, but in 2021, there was a 70% rise in couple-friendly hotel bookings around this time.
It’s clear that a huge variety of businesses in the leisure, hospitality, manufacturing and retail sectors benefit directly from Valentine’s Day and similar celebrations at the same time. And there’s a knock-on effect for suppliers for those industries, too.
Accounting for taste
So, what does this mean for chartered accountants? Whitaker’s Chocolates is a 135-year old chocolate manufacturer. The family business is based in Skipton, Yorkshire and is the UK’s largest supplier of personalised chocolates.
“Christmas is by far the busiest time of year from us, followed closely by Valentine’s Day,” says Gemma Whitaker. “Over the last couple of years, we have seen spending habits change, and Valentine’s shopping seems to start earlier each year. Whilst this spending shift is great for the finances of the business, it is also a challenge to ensure we create enough stock at the end of the year to serve the demand from our customer base.”
In a business such as Whitaker’s, this means chartered accountants are using their planning skills: managing stock levels and resource allocation. “We are lucky in our business that planning for seasonality just comes naturally as we have done it for so long,” Gemma adds. “We can quickly adapt to the needs of our customers and if other events arise that we feel would be beneficial to the business and our customers, we can quickly turn production on to create new products for the market. We run a very flexible business with great people.”
The business, which can produce over two million chocolates a day, typically has 100 employees on its books but during seasonal peaks can employ 160 people.
“We have a small but perfectly formed business,” Gemma says. “Our team are loyal and have years of experience meaning they are very agile.
“Of course, extra sales mean additional work. However, over the years we have invested heavily in systems and automation, which has been key to our growth. This investment has also helped limit additional stress and work levels on our team members, especially on accounts.”
Another challenge for chartered accountants is that Valentine’s Day happens to fall in February. As Gemma explains: “The beginning of the year is always a busy time for accounts, as they are finalising the year end management accounts; they are basically closing the previous year down, getting all the relevant data together to enable them to publish final year end reports; as well as processing customer invoices and debt collection.”
Managing VAT, year-end accounts and posting a greater number of transactions means February will be a busy time for chartered accountants. But it’s also an opportunity for chartered accountants to demonstrate their skills and assist their businesses at one of the most valuable times of the year. With the amount that people spend on Valentine’s appearing to increase with each generation, chartered accountants’ expertise will only continue to grow in importance to these businesses.