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It’s going to be a big year for Halloween, despite millions of Americans feeling under financial pressure due to inflation.
Total spending is expected to hit $10.6 billion, an increase of 5% or $500 million on last year, the National Retail Federation estimates. That’s up $2 billion or 20% on the $8.8 billion Halloween expenditure in 2019 before the COVID-19 pandemic.
Spending on costumes expect to reach $3.6 billion this year, the NRF survey finds, the highest since 2017. Adult costume spending could reach $1.7 billion this year, $200 million more than last year.
More than half (57%) of Americans said that inflation did impact their Halloween spending, according to a separate LendingTree Halloween spending survey. In fact, nearly a quarter of this group said they were buying less candy.
Inflation was 8.2% in September compared to last year, according to Bureau of Labor Statistics data. It was among the highest level in the past four decades.
Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record, the BLS said. To put that in context: Candy and chewing gum increased 13% from December 1997 to December 2006.
“Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record.”
For those who haven’t started, the competition was already on. In July, Home Depot
HD,
announced that its popular 12-foot skeleton was sold out, three months before the celebration.
A Home Depot spokesperson confirmed the initial sellout of the skeleton in summer, and said the company has been releasing more of these items periodically since then.
Supply-chain disruptions could also complicate the competition. During Hershey’s
HSY,
second-quarter earnings call in July, Chief Executive Officer Michele Buck said the candy manufacturer had to prioritize the everyday candy packaging over the Halloween ones. She said that decision was “critical to enable us to increase advertising and merchandising levels.”
In an email to MarketWatch, however, a Hershey’s spokesperson said this decision was not a sign of shortage, adding that the brand had produced more candies for the season than they had in previous years, as Halloween demand remains high.
“Like every season over the past few years, sell-through at retail remains high with people purchasing candy, décor and other seasonal items earlier and more often. As a result, seasonally packaged candy may be more limited on the shelf as we get to the final week of the season. Fortunately, the same great brands in snack sizes are available to help fill trick-or-treat bags and buckets,” she said.
“On average, Americans plan to spend between $100 and $169 on Halloween candy, décor, cards and costumes.”
On average, Americans plan to spend $100 on average for Halloween candy, décor, cards and costumes, the National Retail Federation said. LendingTree estimates that households will spend $169 this year, with six-figure salary earners and parents with young children planning to spend the most — $340 and $309 respectively.
More than a third of the consumers surveyed admit they plan to spend more than they can afford this year. Generation Z — those aged 18 to 24 — and parents with younger children are the most likely to admit to overspending.
“With the worst of the pandemic further in the rearview mirror, people are excited to get back to spending on the things they love most —, particularly the things they maybe couldn’t fully enjoy over the last few years,” LendingTree chief credit analyst Matt Schulz said.
The most common reason for overspending: 44% of respondents said they spent more than they had expected, while 34% said they were making their children happy.
The NRF concluded that 40% of people are shopping at discount stores this Halloween, 36% at specialty Halloween costume stores, and 31% online. Another 11% said they will shop at thrift stores and resale shops.
“Social media is playing an increasingly important role in consumer behavior, and Halloween is no different,” Phil Rist, executive vice-president of strategy at Prosper Insights & Analytics, said. “Younger consumers, particularly those under the age of 25, will look to platforms like Instagram and TikTok for costume inspiration this year.”
