The Supply Side: Retailers, candymakers hope for better Halloween sales

by Kim Souza ([email protected]) 573 views 

According to the National Retail Federation, Halloween is the second-largest spending holiday behind Christmas, and last year’s total sales of $8 billion were at the lowest levels since 2015. With many consumers now vaccinated against COVID-19 and schools back in session, retailers and candy manufacturers plan for better results this year.

NRF has not yet provided its Halloween forecast. Still, surveys from The Hershey Co. and Fayetteville-based Field Agent indicate consumers want to get out and celebrate this year despite the unknowns around the delta variant.

Halloween spending topped out at $9.1 billion in 2017 and has been trending downward since, falling most sharply last year amid the pandemic. While overall spending was $800 million lower than last year, with 148 million still celebrating in some fashion, average spending per household was $92.12, up from $86.27 in the year before the pandemic.

Walmart U.S. CEO John Furner recently said store traffic has improved in recent months. The stores were fortunate enough to get Halloween displays set early despite concerns around shipping delays. He said seasonal sales for Halloween and fall decorating have been strong as consumers want to celebrate with friends and family.

According to the Hershey survey, a Harris Poll taken in August found 86% of adults surveyed are more excited about Halloween this year than in previous years. Hershey found that 59% of parents with a child under 18 have already started thinking about their Halloween celebrations. The survey also found that 66% of people between 18 and 34 plan to do more for Halloween this year compared to previous years.

Specialty retailers such as Spirit Halloween and Party City recently announced plans to ramp up hiring, expecting consumers to spend more in 2021. In July, Spirit said it planned to hire 35,000 additional workers for the 1,425 temporary stores it would open ahead of Halloween. Home Depot also recently reported that its displays of Halloween decorations placed in stores early had sold out, indicating consumers are excited to celebrate Halloween.

Party City plans to open from 80 to 100 Halloween City stores this year, up from 25 in 2020 but well below the 250 opened in 2019. During its second-quarter earnings call, CEO Brad Weston said Party City is “well-positioned for the upcoming Halloween season” but prepared to make adjustments. He said the biggest challenge with 2020 was the lack of trick-or-treaters and Halloween school activities.

“We’re ready for any level of demand as we are sort of still in a volatile and dynamic time,” Watson said. “We would anticipate this year being more kid- and family-friendly if the pandemic allows more normalized activity, and we would anticipate being the beneficiaries of that.”

Analysts and economists expect consumer spending to remain elevated through 2021, noting big box and specialty stores are poised to do well amid solid foot traffic.

“I see a two-pronged reality with an uptick in foot traffic at smaller stores, boutique shops, and for specialty store owners,” said David Spear, retail and supplier consultant with Teradata. “While at the same time, there’s a steady demand at larger, deal-oriented stores like Costco or Walmart. Consumers are keen to find new, fresh ideas and cool items at local boutique shops. At the same time, these same consumers stock up on staples where they believe in the value of the deals offered. As we head into Halloween and Thanksgiving, I’m very bullish that foot traffic will be well paced.”

Ken Morris, a managing partner with Cambridge Retail Advisors, said retailers see Halloween as Christmas in October. He said coffee retailers began offering pumpkin-spiced products in August, well ahead of the fall season. Like Christmas decor sales, he noted that Halloween sales are starting earlier each year, and 2021 is no exception.

Morris predicts earlier in-store shopping than usual to beat the crowds. Oct. 31 this year is on a Sunday, giving adults two full Halloween weekend nights, which should push sales in that segment.

“Sunday Halloween has to be a positive for trick-or-treating for families with younger children, too, so all signs point to a significant lift in sales for all things Halloween this year,” Morris said.

While there are plenty of early signs of solid Halloween sales, Dave Bruno, director of retail market insights at Aptos, said that rises in COVID cases over the next several weeks could threaten trick-or-treating and party celebrations.

Gary Sankary, a retail strategist at Esri, is not optimistic about Halloween 2021. He said there is plenty of pent-up demand, and sales will be better than last year. But there is still a pandemic, and trick-or-treating will not likely return this year for many U.S. communities. He said the practice has declined for several years, with families opting for parties and other celebrations with friends. Sankary said home decorating has been strong but may have reached its peak.

Field Agent recently surveyed its agent base, and 78% said they would make Halloween purchases this year. The survey found that 81% planned to buy Halloween purchases at Walmart, 67% at Target and 38% said they would seek out Amazon for holiday purchases. Four in 10 respondents said they plan to spend more this year, and 21% said they would spend less.

Field Agent also recently put out a report to help consumer packaged goods companies and suppliers with tips to rein in Halloween, late fall and Christmas sales. The marketing firm found out that just 49% of consumers passed out Halloween candy last year, but 66% of those surveyed plan to hand out candy this year.

The sales guide said it would be essential to increase the brand’s footprint in stores, especially for the short-selling season of Halloween. It is also crucial for the candy displays to be close to as many purchase-minded shoppers as possible.

Field Agent said floor space wars are real and intense and a much more complicated game for smaller suppliers to win. The report said it’s important to be early with shipments. Halloween candy and decorations have been in place for weeks, with some products already sold out.

Field Agent said Halloween is the first of four unique seasonal selling seasons, and being early to each setup is key to generating the most sales. Creativity and lots of preparation will be necessary for candy and other holiday decor suppliers to win the fourth quarter.