Halloween spending set to rise by $500 million as candy prices rise at fastest pace ever


By Zoe Han

Americans will spend a record amount on costumes, decorations and other Halloween items this year, according to the National Retail Federation

It’s going to be a big year for Halloween, despite millions of Americans feeling financial pressure from inflation.

Total spending is expected to reach $10.6 billion, an increase of 5%, or $500 million, over last year, according to National Retail Federation estimates. That’s an increase of $2 billion, or 20%, from the $8.8 billion spent on Halloween in 2019 — the last sleight of hand before the COVID-19 pandemic.

Spending on costumes is expected to hit $3.6 billion this year, according to the NRF survey, the most since 2017. Spending on adult costumes could hit $1.7 billion this year, up $200 million than last year.

More than half (57%) of Americans said inflation affected their Halloween spending, according to a separate LendingTree survey. Almost a quarter of respondents said they buy less candy.

Inflation rose 8.2% in September from a year ago, according to data from the Bureau of Labor Statistics, putting it at one of the highest levels in four decades.

The price of candy and chewing gum rose 13.1% year-on-year in September, the largest increase on record, the BLS said. To put this into context: it took nine years, from December 1997 to December 2006, for the prices of candy and chewing gum to increase by this amount.

Those who haven’t started their Halloween shopping yet may have a hard time finding what they’re looking for. In July – three months before the holidays – Home Depot (HD) announced that its popular 12ft skeleton was sold out.

A Home Depot spokesperson confirmed the skeleton’s initial sale in the summer and said the company has periodically released more items since then.

Supply chain disruptions could also complicate competition. During Hershey Co.’s (HSY) second-quarter earnings call in July, CEO Michele Buck said the candy maker needed to prioritize its everyday candy wrappers over Halloween. She said the move was “essential to allow us to increase levels of advertising and merchandising”.

In an email to MarketWatch, however, a Hershey spokesperson said the move was not a sign of a shortage, adding that with Halloween demand remaining high, the brand had been producing more candy for the season than in previous years.

“Like every season for the past few years, retail sales remain high, with people buying candies, decorations and other seasonal items earlier and more often. As a result, seasonally packaged candies may be more limited on the shelves as we get to the last week of the season,” the spokesperson said, adding that snack sizes would still be available.

On average, according to the National Retail Federation, Americans plan to spend $100 this year on candy, decorations, cards and Halloween costumes. LendingTree estimates households will spend $169 this year, with six-figure earners and parents of young children planning to spend the most — $340 and $309, respectively.

More than a third of consumers surveyed admit they plan to spend more than they can afford this year. Gen Z — those aged 18 to 24 — and parents with younger children are the most likely to admit overspending.

“With the worst of the pandemic further in the rearview mirror, people are excited to start spending again on the things they love most – especially the things they may not have taken full advantage of in recent years. years,” said LendingTree’s credit manager. analyst Matt Schulz.

The most common reason for overspending was doing it accidentally: 44% of respondents said they spent more than planned. Meanwhile, 34% said they spend money to make their kids happy.

The NRF found that 40% of people shop at discount stores this Halloween, 36% at specialty Halloween costume stores, and 31% online. Another 11% said they would shop at thrift and resale stores.

“Social media is playing an increasingly important role in consumer behavior, and Halloween is no different,” said Phil Rist, executive vice president of strategy at Prosper Insights & Analytics. “Young consumers, especially those under 25, will be turning to platforms like Instagram and TikTok for costume inspiration this year.”

-Zoe Han

 

(END) Dow Jones Newswire

10-23-22 1547ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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