Halloween is a short 12 days away, and spending for the holiday is soaring. According to the National Retail Federation’s (NRF) annual survey conducted by Prosper Insights & Analytics, total spending for Halloween is expected to reach $8.4 billion this year. This marks an all-time high in the survey’s 11-year history. US consumers are expected to spend an average of $82.93 on Halloween this year (based on 171 million Americans planning to celebrate Halloween), which is about $8 more than last year. From a supply chain standpoint, Halloween is big business, considering the amount of candy, costumes, and decorations that need to be moved around the country.
One of the more interesting things about Halloween is the pop-up or specialty Halloween store. These are the store that show up in strip malls nationwide at the end of September and disappear by the first week in November. The majority of these stores focus their efforts on costumes, but also sell some decorations and candy. Pop-up stores are not a new concept, as they have “popped up” in many obscure places (like pop-up restaurants too). However, making sure that each one is sufficiently stocked with the right assortments and number of costumes is no easy task. While the tried and true costumes of years past usually remain an easy sell, every year there is a new trend that stores will try to take advantage of (think creepy clowns or Ken Bone this year). The stores need to quickly source these products and get them in stock in a short period of time. The logistical constraints from this are significant, especially considering how many pop-up and specialty stores are trying to secure the costumes.
This year alone, US consumers will spend $3.1 billion on costumes. This number is about an equal split between adults and kids costumes. According to the NRF, a little over 36% of these costumes will be purchased from a specialty Halloween shop. That represents about $1.1 billion in revenue for stores that operate for about a month. The largest percentage of shoppers will buy costumes from discount stores, representing about $1.4 billion.
The second largest purchase bucket for Halloween is candy. US consumers are set to spend $2.5 billion on candy this year. Small “fun size” candy is generally available throughout the year, but the output required for Halloween is ridiculous. Candy companies need to ramp up production over the course of August, September, and October to meet the volume needs of retailers. This requires more ingredients in short time, which can raise the prices of Halloween candy. Additionally, the candy needs to get shipped out across the country to stores everywhere. It is one of those holidays where a missed shipment can mean a candy shortage, and waiting a few extra days can mean retailers miss the boat. Late deliveries can lead to the dreaded fire sale where prices are slashed the first week of November.
US consumers are set to spend $1.4 billion on Halloween decorations this year. There are a few different categories when it comes to decorations. First are the standard home decorations (spiders, witches, ghosts, etc.) that go up in the yard or on the front door. The second are jack-o’-lanterns. The pumpkin has grown in popularity over the last few years, and Halloween is not the end-all be-all for this particular squash. Pumpkin flavored everything, from muffins and lattes to beer, has resulted in a bit of a shortage this year. The shortage has been mainly in the processed pumpkin business due to a lack of rain, but the supply of jack-o’-lantern ready pumpkins has also dipped. As supply has gone down, prices have risen. With 45% of US consumers planning on carving pumpkins (according to the NRF survey), that puts a strain on the supply chain.
With so many moving parts, and so many things to buy, US consumers are certainly busy this month. However, October proves to be an extremely busy month for retailers as well. While they are selling Halloween related merchandise, they are mostly planning for the upcoming holiday season and working diligently to get all of their holiday merchandise in. Both east and west coast ports in the US see their volumes pick-up in October in anticipation for the holiday rush. So while we all enjoy the trick-or-treating, pumpkin carving, and all the little chocolate treats we can handle, retailers are scrambling to get ready for the next round of holiday shopping.