Experts predict slow growth in 2023 holiday sales as consumers tighten their belts in a tough economy, but e-commerce will remain a bright spot.
The love for Halloween seems to grow every year. People of all ages love the chance to dress up, eat candy, and celebrate the fall season. All that Halloween spending adds up to brisk business for retailers selling costumes, decorations, and sweets.
This year, consumers are expected to spend a record $12.2 billion to celebrate Halloween, according to a survey by the National Retail Federation. Last year, they spent $10.6 billion.The survey of more than 8,000 consumers found that participation in the spooky holiday will grow from 69% in 2022 to 73% this year – a record number handing out candy, decorating their homes and yards, dressing up, or going to parties.
But other Halloween spending forecasts aren’t as upbeat, possibly dimming retail hopes for a banner holiday.
Trick or treat: Inflation takes a bite out of Halloween spending
A survey of 1,000 consumers by Advantage Solutions found that 41% expect inflation to impact their candy spending this Halloween.
Half of that 41% expect to spend the same amount on Halloween candy, but get less for their money. Thirty percent said they won’t spend as much as last year on candy due to higher prices.
Another study, by Jungle Scout, found that 45% of consumers plan to cut back on their Halloween purchases this year. However, the survey also revealed generational differences, with 40% of millennials planning to spend more while Gen X and Baby Boomers expect to spend at least 50% less than last year.
Jungle Scout attributes the difference to the fact that millennials are much more likely to have young children needing costumes than the older generations.
Hot costumes: Spiderman, Barbie, Mario
According to NRF’s research, per-person Halloween spending on costumes, candy, and decorations will top $108, about $6 more than two years ago.
With 69% of consumers planning to buy costumes, total spending on dressing up for the holiday will reach a record $4.1 billion, up from $3.6 billion last year. Costume spending is expected to rise for both adults and children, but in a somewhat surprising twist, Halloween revelers don’t plan to spend more than last year on costumes for their pets.
This year’s top costumes are heavily influenced by recent movies and popular culture, with Spiderman and Barbie ranking among the top 10 most popular costumes for both children and adults.
The release of the Super Mario Bros. Movie last month drove massive sales of Princess Peach, Mario, and Luigi kid costumes on Amazon, according to Jungle Scout. Other popular costumes on Amazon include Harry Potter, Wednesday Addams, the Little Mermaid, and cartoon plush onesies.
When it comes to Halloween candy, chocolate tops shoppers’ list while a giant spider web is the top-selling decoration for the spooky holiday.
Spending on candy could reach $3.6 billion while shoppers will shell out $3.9 billion on decorations, maintaining a festive trend that became popular during the pandemic, NRF’s research found.
Find out how merchandisers aim to boost margins, profits, and customer loyalty in the digital retail era.
Halloween shopping: Where and when
Forty percent of those surveyed by NRF indicated a preference for discount stores for their Halloween purchases. Specialty Halloween (think pop-up) stores are a favorite for 39% while 32% shop online for the holiday.
However, the growing popularity of Halloween didn’t help keep one specialty retailer, Party City, from declaring bankruptcy earlier this year, according to a Retail Dive report.
Amazon is the top Halloween shopping destination among those surveyed by Jungle Scout, especially those who are Gen Zers and millennials. That survey also found that social media like Facebook and Instagram are popular e-commerce platforms for Gen Z shoppers.
Like other big holidays, consumers like getting an early start on their Halloween shopping with many starting before October, NRF said.
But retailers shouldn’t replace Halloween items with winter holiday gifts and and decorations too early. The Advantage Solutions study found that nearly 75% of grocery shoppers will shop for candy during the last two weeks of October.
“Keeping these products on the shelf and in displays couldn’t be more critical for both candy brands and retailers, especially during the run-up to Halloween when shoppers are most active,” Andy Keenan, executive VP of retail services at Advantage Solutions, said in a statement.